Life Insurance and LTD Questions
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Life Insurance Questions
Could you explain the difference between "basic" and "supplemental" life insurance?
The company provides to all full-time employees, at no cost, "basic" life insurance in the amount of 1½ times annual pay. "Supplemental" life insurance may be purchased by the employee in the form of a) optional life insurance (additional employee life insurance) and b) dependent life insurance (coverage for spouse or child).
Must I purchase optional life insurance for myself before I can purchase dependent life for a spouse or child?
No. Dependent life insurance coverage for a spouse or child may be purchased even if optional employee life insurance is waived.
With dependent life insurance for children, can I buy life insurance for one child, but not my other children?
NO. Dependent child coverage insures all eligible children at the selected level for one price.
For example, one child cost the same as two or more children.
Is the life insurance portable?
Yes. If you terminate employment, you may port (move) your life insurance coverage to an individual policy — at your own expense — if you apply within 31 days of the date your coverage ends. To apply for portability coverage, contact your local HR department to obtain the appropriate form. For more information on portability contact MetLife at 866-492-6983.
Why are premium rates for supplemental life insurance payroll deducted on an "after-tax" basis?
The company deducts these premium rates on an "after-tax" basis due to IRS tax regulations.
Can optional life coverage for me or dependent life coverage for my spouse or child be dropped during the Plan year?
Employee optional life insurance can only be dropped during Open Enrollment. However, certain life-changing events such as divorce or death may allow dependent coverage to be dropped midyear. Check with your local HR department for more information.
Can employee optional life insurance be added, changed or dropped midyear?
No. Employees can only enroll, drop or make changes to their optional life insurance coverage during Open Enrollment.
Employee optional life insurance can be purchased at 1x, 2x, 3x, 4x, 5x, or 6x "annual pay". What does "annual pay" cover?
Your annual pay is your actual gross earnings (rounded to the next $1,000) for the preceding calendar year and includes base pay, overtime pay, bonuses and commissions.
How do I pay for the supplemental life insurance premiums?
Optional and dependent life insurance premiums are payroll deducted on an after-tax basis.
Employee optional life insurance premium rates are based on coverage level, annual pay, tobacco usage status and age. Do I use my age as of enrollment?
No. Your rate is based on your "insurance" age as of the first of the Plan year. To determine your "insurance" age, take the Plan year (2009), then subtract your birth year. The result is your "insurance" age for all of 2009.
Do only heavy smokers need to use the tobacco rates for employee optional life?
No. Your use of any tobacco product within the last 12 months qualifies you for this higher rate.
Long-Term Disability (LTD) Questions
How much do I pay for LTD coverage?
The company pays the full cost of this benefit by paying premiums to the insurance carrier. Employees are taxed on the monthly LTD premium, and would, therefore, receive LTD benefits tax free.
What is the monthly benefit if I go on LTD?
The LTD plan provides 60% monthly income replacement or 70% less any additional income up to a maximum monthly benefit of $12,500 in the event an employee becomes disabled as defined by the plan. The minimum benefit is $100 per month or 15% of the monthly benefit before deductions for other income benefits.
What is the LTD definition of "disabled"?
An employee is considered to be disabled and eligible for disability benefits if, due to any injury or illness, he/she is unable to perform his/her regular occupation and, after benefits have been paid for 36 months, he/she is unable to perform any gainful occupation for which he/she is suited by skills, occupation, or training.
What is considered a LTD preexisting condition?
A preexisting condition is one for which an employee received medical treatment, care, or services, including diagnostic measures, or took prescribed drugs or medicines in the three months prior to his/her effective date of coverage. During your first year of LTD coverage, LTD benefits will not be payable for any disability that commences during your first year of coverage if the disability is a result of a preexisting condition.
When do LTD benefits begin?
LTD benefits begin after an employee has been disabled for 90 days. This is what is known as the elimination period.
When would LTD benefits not be paid?
LTD benefits will not be paid for a disability caused by:
- Intentionally self-inflicted injuries while sane or insane
- Any armed conflict, war, or act of war (declared or undeclared)
- Taking part in a riot
- A condition for which you were treated or on medication during the three months prior to being covered by the company LTD plan
- Loss of professional license
- No benefit will be payable for a period in which you are incarcerated
Is there a return to work incentive for those on LTD?
Yes, because the plan pays partial disability, an employee can return to work and still qualify for partial disability benefits, and be reinstated to their full medical benefits if applicable.
How do LTD survivor benefits work?
If an employee has been disabled for at least 180 days, is receiving long-term disability benefits, and dies, Unum pays a benefit to the survivors to help support them with immediate costs associated with the loss of the employee's income. This benefit is equal to three times an employee's gross monthly LTD benefit and is payable first to the spouse, then to any children under age 25, and then to the estate in the absence of a spouse or children.
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