UpDate - Vol. 12, No. 29, Page BENEFITS-3
April 29, 1993
Benefits
Group life insurance program

     The University group life insurance program offers four options to
flexible benefits participants.  These are: $10,000, $50,000, two times
salary and four times salary.

Accelerated benefit
     An option to accelerate payment of death benefits for terminally ill
employees was introduced last year by UNUM, the University life insurance
carrier. For this purpose terminally ill is defined as "having a medical
prognosis of 12 months or less to live." Eligible employees, while living,
can receive a portion of their life insurance benefit by notifying UNUM in
writing and obtaining written confirmation from their attending physicians.
     Upon approval, payment will be made in a lump sum for an amount equal
to 50 percent of the death benefit or $50,000 whichever is less. Premium
payments must continue on the full amount of life insurance unless the
waiver of premium provision is in effect.
     UNUM has no liability for any tax or other consequences relevant to
the accelerated benefit payment. Neither is this benefit available to meet
creditor or bankruptcy claims, nor to apply for, receive or keep government
benefits or entitlements.

Group life costs
     Many questions arise, especially at tax time, about the "group life
cost" box on w-2 forms. The Internal Revenue Service (IRS) requires the
University to report the cost, for tax purposes, of any group life
insurance amount which exceeds $50,000. The amount is determined by an IRS
table which lists costs per $1,000 per month according to age groupings.
The tax consequences to employees depends on their income tax bracket. For
example, a $100 group life cost for someone in the 28 percent tax bracket
would be $28. Employees, who have no need for excess life insurance
amounts, can avoid group life costs completely by selecting the $10,000 or
$50,000 life insurance option.