“Hope for the best, but plan for the worst” is a good philosophy to live by. It also underscores why insurance exists. If you ever need it, life and accident coverage will go a long way toward protecting your family financially. And that can give you some serious peace of mind.
How It Works
You automatically receive a basic level of coverage for both life and accidental death and dismemberment (AD&D) insurance, paid for by CSL. You can choose to purchase additional coverage for yourself and your dependents.
Basic Life Insurance
CSL pays for basic life insurance that will pay your beneficiary an amount equal to the greater of $25,000 or 1x your regular annual eligible earnings, up to the plan’s $1 million maximum.
Supplemental Life Insurance
In addition to your basic life insurance, you can purchase more protection for your loved ones — from 1x to 8x your regular annual eligible earnings, up to the plan’s $2 million maximum. Note: Certain amounts of supplemental coverage may require evidence of insurability (EOI).
Dependent Life Insurance
If you have supplemental life insurance, you can also purchase dependent life insurance, which pays benefits to you if your child or spouse/domestic partner passes away.
You can purchase spouse/domestic partner life insurance in increments starting at $25,000, up to as high as $500,000 (coverage must be less than your supplemental life coverage). You can purchase child life insurance in amounts of $5,000, $10,000, $15,000 or $20,000 for children up to age 26. Note: Certain amounts of spouse/domestic partner coverage may require evidence of insurability (EOI).
If you are terminally ill (defined as a life expectancy of less than 12 months), you may be able to receive an accelerated death benefit through the basic, supplemental and dependent life insurance plans.
Basic AD&D Insurance
CSL automatically pays for AD&D insurance, which provides a cash benefit if an accident causes a death or certain severe injuries (such as a loss of limb or eyesight). The amount is equal to the greater of $25,000 or 1x your regular annual eligible earnings, up to the plan’s $1 million maximum.
Supplemental AD&D Insurance
In addition to your basic AD&D insurance, you can also purchase supplemental AD&D coverage, which is available to you at 1x to 8x your regular annual eligible earnings. It pays a benefit if:
- your death is caused by a covered accident;
- you lose a limb or eyesight; or
- you experience other losses as the result of a covered accident.
Dependent AD&D Insurance
If you have supplemental AD&D coverage, you can also purchase coverage for your dependents. You can cover your spouse/domestic partner in increments starting at $25,000, up to as high as $500,000 (coverage must be less than your basic and supplemental AD&D coverage). You can cover your dependent children up to age 26 in flat-rate amounts of $5,000, $10,000, $15,000 or $20,000.
Things to Consider
When deciding whether to enroll in life or AD&D insurance, be sure to consider the following:
Cost per paycheck. Any coverage contributions you elect for yourself or your dependents will be made on an after-tax basis. Depending on the type of insurance, contribution rates will be higher if you and/or a covered dependent uses tobacco. During enrollment, you’ll be asked to certify each covered person’s tobacco status. If you don’t, you’ll be defaulted to a tobacco-user rate and you won’t be able to change it until the next Annual Enrollment.
Your family’s needs. Remember that life insurance is intended to help protect your family financially if a covered family member dies. Would you have enough money to pay funeral expenses? Would you need to replace an income? Every situation is different, so consider your family situation carefully.
Evidence of insurability requirements. In order to buy certain levels of supplemental and dependent life insurance coverage, you’ll need to prove that you’re in good physical health. This is called providing evidence of insurability (EOI). If EOI is required, you’ll be able to complete Lincoln Financial’s medical questionnaire online when you enroll. Please complete the form online and submit it promptly. Full coverage won’t take effect until Lincoln Financial approves your coverage. If you don’t submit the EOI form or it’s not approved, you’ll receive the highest level of coverage that doesn’t require EOI, if any.
Employer-provided life insurance greater than $50,000 is considered imputed income (a taxable benefit). Imputed income is the term the IRS applies to the value of any benefit or service that should be considered income for the purposes of calculating your federal taxes. The value of the coverage is the amount the IRS assumes you would have to pay to purchase a policy in that amount in the private market. This value is based on your age and the amount of coverage you have. Imputed income is added to your pay for tax purposes, and the additional taxes that you owe are deducted from your paycheck.
Choose Your Beneficiaries
Your family depends on you for all kinds of things — including your pay. Make sure to choose the people and/or estate that should receive your life insurance benefit if you die. It’s important that you make your beneficiary elections on Benefits In-Site.
Here’s what you’ll need to do:
- Gather the Social Security numbers and birth dates for each beneficiary.
- When you’re enrolling in life insurance, designate your beneficiaries when you’re prompted.
You can change beneficiaries at any time. If you die and have no beneficiaries on file, the benefit may — or may not — eventually reach the individual(s) you’d prefer. The result could be a significant delay in payment during an already challenging time for your loved ones.