Overview
Life and Accidental Death & Dismemberment (AD&D) insurance helps protect the financial well-being of your loved ones in the event of your death or severe injury. Basic and Supplemental Life and AD&D Insurance coverages are provided by Unum, and Universal Life Insurance coverage is provided by Transamerica.
Basic Life and AD&D Insurance
Perceptive provides basic life and AD&D insurance automatically, at no cost to you. You do not need to enroll for basic coverage.
Benefits are equal to:
- Basic life insurance: 2 times your salary, up to a maximum benefit of $1,000,000.
- Basic AD&D insurance: 2 times your salary, up to a maximum benefit of $1,000,000.
Supplemental Life and AD&D Insurance
You have the option to purchase additional life and AD&D insurance for yourself and your spouse and child(ren). You pay the full cost of any supplemental life insurance and/or supplemental AD&D insurance coverage. If you want supplemental coverage, you must enroll during enrollment on the Aptia365 website.
- Supplemental employee life insurance: Available in $10,000 increments up to a maximum benefit of $1,000,000 or 5 times your salary, whichever is less.
- Spouse life insurance: Available in $5,000 increments up to a maximum benefit of $300,000. You may purchase spouse life insurance without also purchasing supplemental employee life insurance.
- Child life insurance: Available in $2,000 increments up to $20,000, for children from 14 days old up to age 26.
- Supplemental AD&D insurance: Available in $10,000 increments up to a maximum benefit of $1,000,000 or 5 times your salary, whichever is less; coverage may be purchased for just you or for you and your family.
Imputed Income
Under federal income tax law, company-provided life insurance of more than $50,000 is considered a taxable benefit. This means if your basic life insurance coverage exceeds $50,000, the company’s cost to provide the “excess” amount (above $50,000) is considered “imputed income” for tax purposes, and you must pay taxes on that amount.
For example, let’s say an employee is 45 years old with an annual salary of $175,000, receiving Perceptive-provided basic life insurance coverage of $350,000 (2 times salary). The first $50,000 of coverage is tax-free. The employee must pay taxes on the cost to provide the additional $300,000 in coverage as imputed income.
To calculate the amount of imputed income, the employee refers to the IRS tax table, finds their age (45 years old), and identifies the rate used to calculate the cost (0.15).
The employee then divides the taxable coverage amount ($300,000) by $1,000 and multiples it by the IRS tax table rate of 0.15. In this example, the employee’s monthly imputed income for basic life insurance is $45.00.
The employee identifies that their personal tax bracket is 30%; he multiplies the $45.00 by 30% and identifies he will pay about $13.50 in taxes per month ($6.75 semi-monthly).
For more information regarding the IRS tax code, please visit the Group Term Life Insurance section of the IRS website.
Evidence of insurability
Life insurance above the guaranteed issue amount may require evidence of insurability (EOI). Please note that you will have to re-enroll in supplemental life insurance coverages (for you or your spouse) during Open Enrollment, and any previously issued EOI approvals will not be honored.
The guaranteed issue amounts for new policies are:
- Supplemental employee life insurance: $350,000
- Spouse life insurance: $50,000
- Child life insurance does not require evidence of insurability.
- After electing coverage, you will receive more information if EOI is required.
Universal Life Insurance
You also have the option to purchase universal life insurance from Transamerica. Universal life insurance contains a cash value that grows tax-deferred until funds are withdrawn. You are able to change the amount and frequency of contribution rate payments as long as there is sufficient cash value in the policy to cover monthly deductions. Unlike term life insurance, your benefit never decreases and your contribution rates never increases as you age.
Universal life insurance may be purchased for you, your spouse, and your child(ren) and is available in the following amounts:
| Employee | Spouse | |
|---|---|---|
| $25,000 | $100,000 | $15,000 |
| $50,000 | $125,000 | Child |
| $75,000 | $150,000 | $10,000 |
Be sure to name a beneficiary for Basic and Supplemental Life and AD&D
It’s important to designate a beneficiary to receive the benefit paid by a life insurance policy. As personal circumstances change, be sure to keep that information up to date. Visit the Aptia365 website or call 1-866-385-8032 to add or change a beneficiary.
If you elected Universal Life Insurance via Transamerica , you will need to add beneficiaries on their website.