GROUP LIFE INSURANCE


Keith Smith provides answers to our Frequently Asked Questions (FAQ)


QUESTION

How much group life insurance do I have as a salaried retiree?

ANSWER

The amount of group life insurance coverage for salaried retirees is determined by monthly salary on last day worked.

- Retired after January 1, 1989 18 x Base Monthly Salary

Example: Salaried employee with base monthly salary of $4000/month

Retired prior to Jan. 1/89 = 4000 x 24 = $96000

Retired after Jan 1/89 = 4000 x 18 = $72000


QUESTION

Does the amount of life insurance reduce and if so when?

ANSWER

If you retired prior to Jan. 1, 1989, the life insurance in force at retirement stays fully in force until age 65, and then it reduces at 2% per month until it reaches the C.G.L. (Continuing Group Life Amount).

If you retired after Jan. 1, 1989 the amount of life insurance in force commences to reduce on the date of your retirement at 2% /month until it reaches the C.G.L. amount.


QUESTION

How is the C.G.L. (Continuing Group Life) amount calculated?

ANSWER

The formula for calculating the minimum amount of life insurance or C.G.L. is as follows:

Base monthly salary x (24 or 18) x years of pension creditable service x 1.5%.

Example: Retired prior to January 1, 1989 with base salary of $4000 and pension creditable service of 35.0 years.

C.G.L. = 4000 x 24 x 35.0 x .015 = $50,400

Example: Retired after January 1, 1989 with same salary and same service.

C.G.L. = 4000 x 18 x 35.0 x .015 = $37,800.


QUESTION

Can I change the beneficiary of my group insurance?

ANSWER

You have the right to change your beneficiary at any time.


QUESTION

How do I go about changing the beneficiary?

ANSWER

Contact the Company Benefits Administrator and request a "Beneficiary Change Card". You then complete the change card by designating a new beneficiary and signing it. A person other than the designated beneficiary must witness your signature.


QUESTION

Can I designate "My Estate" as beneficiary?

ANSWER

Yes. However in cases where the estate has been designated as beneficiary it is adviseable to have a will.

 


QUESTION

Can I cash in my group life insurance?

ANSWER

No. The group life insurance is only paid out in a lump sum at death.


QUESTION

What is my group life insurance identification number and does the Company issue a policy certificate?

ANSWER

The identification number of your group life insurance is your social insurance number. The company no longer issues group life policy certificates.


QUESTION

In case of my death, how does my beneficiary submit a claim for payment?

ANSWER

The Company Benefits Administrator must be notified of any retiree's death. Once a funeral home death certificate is provided, the Administrator files a claim and payment is usually made within 2 - 3 weeks.


QUESTION

Is group life insurance payment subject to tax?

ANSWER

No.

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