Optional Group Term Life Insurance Programinsurance.tennessee.edu/life_opt_term.pdf · Optional Group Term Life Insurance Program For Employees of the State of Tennessee What’s

Optional Group Term Life Insurance ProgramFor Employees of the State of Tennessee

What’s inside:

Why do I need life insurance?

How much is enough?

How do I enroll?

Insuring your future

For assistance, go to www.LifeBenefits.com/StateofTN or call 1-866-881-0631. 3

The State of Tennessee is proud to partner with Minnesota Life Insurance Company to provide optional group term life insurance benefits. This program offers you an affordable way to provide protection for your family.

Before enrolling, there are two very important questions you need to answer: Why do I need life insurance? and How much do I need? This booklet provides information to help you answer those questions and the instructions to enroll in coverage.

Who is eligible for coverage?An employee is eligible for coverage if he or she is employed by the State and scheduled to work no less than 30 hours a week. In addition, seasonal or part-time employees with 24 months of service, who are certified by an appointing authority to work at least 1,450 hours per fiscal year are also eligible. Please see the policy certificate on www.LifeBenefits.com/StateofTN for more details on eligibility for employees and their dependents.

Questions? Call Minnesota Life Customer Service at 1-866-881-0631 from 7 a.m.–6 p.m. CT.

What do I need to know?

Enroll in four simple steps

Step 1 - Determine your needs p. 5-6

Step 2 - Review your coverage options p. 7

Step 3 - Calculate your costs p. 8–9

Step 4 - Enroll p. 10

4 Underwritten by Minnesota Life

What is Group Term Life insurance?

Group Term Life insurance provides a base level of protection that can be enhanced by personal savings, individual life insurance and Social Security benefits. It provides survivors with an “emergency fund,” allowing them to use individual life insurance and other funds for longer-term needs.

• Basic Group Term Life – The State of Tennessee provides all full-time employees under age 65 with at least $20,000 in basic group term life insurance. For many people, this is enough coverage to provide for final arrangements and their loved ones. However, the State recognizes that the kind of life insurance you need can change over time. That’s why the State offers additional Optional Group Term Life coverage for you to purchase if you so desire.

• Optional Group Term Life – This is voluntary coverage paid for by the employee, allowing the employee to choose the amount of insurance that fits his or her personal and financial situation. As of January 1, 2013, the State of Tennessee allows an eligible employee to choose Optional Group Term Life insurance in $5,000 increments to a maximum of seven times the employee’s annual base salary or $500,000, whichever is less.

How much life insurance do I need?Everyone’s needs are unique and it helps to evaluate your family’s financial situation before choosing the exact amount. Visit LifeBenefits.com/insuranceneeds for an online calculator that can help you estimate how much coverage you may need to meet your future goals.

Why do I need life insurance?Think about it. If you died what would happen to the people who depend on you for financial support? Studies* show that the premature death of a household’s breadwinner can have a significant impact on a family’s financial security. Even if the deceased has some life insurance, the amount is often inadequate.

*LIMRA, 2011.


To estimate the amount of life insurance you need, you’ll want to periodically determine what you must protect in the event of your death. This worksheet will help you determine your needs.

Assets and incomeWhat would be available to your family now, if you weren’t here to provide for them?

Spouse’s annual income x number of years to age 65 $

Cash, savings bonds, stocks, securities (current value) $

Company savings plan (401(k), 403(b), other) $

Cash value of life insurance $

Other assets* or income (other than your own) $*Equity in your home, if you plan to sell or borrow against it for cash.

A = $

Basic necessitiesWhat basic needs do you and your family have? (multiply the items below by the number of years required, if applicable)

Home – remaining mortgage or rent (120 months is a basic rule of thumb) $

Annual household operating expenses (utilities, food, clothing, insurance, repairs, property taxes, etc.) $

Childcare $

Health – health insurance premiums or medical/hospital expenses not covered by insurance $

Debt – balances on credit cards, car loans, etc $

B = $

(Continued on next page)

Step1 Determine your needs


Comfort zoneWhat kind of special or one-time expenses may come along?

Tuition $

Wedding $

New residence $

Elder care x number of years $

Estate taxes, probate fees, attorney fees $

Emergency fund $

Funeral expenses (average is $5,000 - $10,000) $

Golden years (money put aside for survivor’s retirement) $

C = $

Complete the equationComplete the equation that most closely reflects your particular needs:

Basic necessities

B - A = $

(Compare to current Life Insurance amount)

Comfort zone

(B + C) - A = $

(Compare to current Life Insurance amount)

Remember, your calculation is based on today’s costs and doesn’t account for inflation or changes in annual earnings. Review your needs periodically – even annually – to ensure that your needs will be met now and in the future.


Below are the options available to you under the Optional Group Term Life insurance plan available through the State of Tennessee.

As a newly eligible employee of the State of Tennessee, you have the opportunity to choose coverage for yourself and your children on a guaranteed basis without providing proof of good health. You must enroll in coverage within 30 days of your initial eligibility. You may apply for spouse coverage; however health related questions(s) will be asked to determine if coverage will be issued

Coverage type Coverage options Additional information

Optional Term Life Insurance

$5,000 increments • Maximum coverage is the lesser of 7x annual base salary or $500,000

• Upto5xannualbasesalaryisguaranteedifelectedwithin30daysofinitialeligibility;Electionsabove5xannualbasesalarywillrequireproofofgoodhealth(Pleaseseepg14fordetails)

Optional Spouse Term Life Insurance

• Spouse is not eligible if he or she is also eligible for employee coverage

• A spouse may apply for coverage within 30 days after the marriage date

Spouse under age 55

$5,000,$10,000,$15,000,$20,000,$25,000or$30,000

• Maximum coverage is $30,000

Spouse age 55 or older

$5,000,$10,000or$15,000

• Maximum coverage is $15,000

Optional Child Term Life Rider

$5,000or$10,000 • Children are eligible from 24 hours to 26 years of age

• A child may also be added to the policy within 30 days of the birth or adoption date

• A child may only be covered by one parent

• All child coverage is guaranteed

• Employee or Spouse must have Optional Term Life coverage for the Optional Child Term Life Rider to be elected

Step2 Coverage options at a glance


Use these examples as your guide to calculating the life insurance costs for you and your spouse.

Example:

Employee age 38, chooses $150,000 in coverage

$150,000 ÷ $1,000 = 150 x $.058 + $0.30 = $9.00Coverage amount

Monthly rate Administrative cost

Monthly cost

Spouse age 34, chooses $20,000 in coverage

$20,000 ÷ $1,000 = 20 x $.047 + $0.30 = $1.24Coverage amount


Monthly cost

Now just fill in the blanks!

$ ÷ $1,000 = x $ + $0.30 = $Coverage amount


Monthly cost

Step3 Calculate your costs


Optional Employee and Spouse Term Life insurance monthly rates

Rates per $1,000 per month

Age Rate

Under 25 $0.044

25 - 29 $0.044

30 – 34 $0.047

35 – 39 $0.058

40 – 44 $0.088

45 – 49 $0.150

50 – 54 $0.252

55 – 59 $0.393

60 – 64 $0.612

65 – 69 $1.016

70 – 74 $1.417

75 – 79 $2.177

80 and over $3.934

Rates are subject to change and increase with age.

Optional Child Term Life rider rates

One monthly premium covers all eligible children.

$5,000 - $0.50 per month$10,000 - $1.00 per month


Step4 Change your information

EnrollYou may only enroll during your initial eligibility period as a newly hired employee or each year during your fall annual enrollment period.

To begin:

• Review all the information in this booklet.

• Determine the level of coverage you want.

• Gather the personal information you will need to enroll, such as Social Security numbers and medical information if you are choosing coverage that requires proof of good health.

Computer enrollmentIt’s easy to enroll in coverage and designate your beneficiary online!

Log on

Log on to www.LifeBenefits.com/StateofTN with the ID and password information provided below.

You will be prompted to change your password the first time you log on.

Your ID: TN + your EdisonID number*

Your password: Your password is your eight-digit date of birth (MMDDYYYY) followed by the last four digits of your Social Security number

* Your EdisonID number can be obtained from your Human Resources Department.

If you do not have access to a computer or the Internet, forms have been included with this booklet. Please complete the forms and return directly to Minnesota Life at the address provided on the top of the form. If you would like assistance with your enrollment, please contact Minnesota Life directly at 1-866-881-0631 from 7 a.m. - 6 p.m. CT.


Enter your information

Follow the instructions on the site to enroll in insurance coverage for you and your spouse and children if desired, and to designate your beneficiary. After submitting your information, please print a copy of your application for your records.

Clean up

Don’t forget to clear your personal information before leaving the computer.

When will my coverage be effective?

New hire coverage will be effective on the first day of the month following three full months of employment. Coverage applied for that is subject to proof of good health will be effective upon approval of the coverage. All elections or increases are subject to the actively at work requirement of the policy. Please see the policy certificate on www.LifeBenefits.com/StateofTN for more details on coverage effective dates and exemptions.


Beyond paying a benefit in the event of your death, your Optional Group Term Life insurance plan has other important features.

Portability – If you are no longer eligible for coverage as an active employee, you may port (continue) your Optional Group Term Life Insurance on a direct bill basis (portable coverage ends December 31 of the year you turn age 70).

Conversion – If your coverage is terminated, you may convert your group term life coverage to an individual life insurance policy. Premiums may be higher than those paid by active employees.

Waiver of Premium – If you become totally disabled before age 60 and remain disabled for nine (9) consecutive months, your life insurance premiums may be waived.

Accelerated Death Benefit – If an insured person becomes terminally ill with a life expectancy of 12 months or less, he/she may request early payment of up to 100 percent of the life insurance amount.

Customized website – You can use www.LifeBenefits.com/StateofTN to manage your Optional Group Term Life insurance coverage for you and your family. For example, you can provide evidence of insurability (if required), designate your beneficiary, calculate your premium payment, and determine how much life insurance you need at this site.

What features does my plan have?

Choosing a beneficiary

Naming a beneficiary is an important right of life insurance ownership. Your beneficiary designation determines who will receive your life insurance benefit. Under current tax law, life insurance benefits paid to a beneficiary are generally not taxable income.

Some common beneficiary choices are:

• Primary beneficiary – The person or persons named will receive the benefit.

• Contingent beneficiary – If the primary beneficiary is no longer living, the benefit is paid to this person.

• Default beneficiary – If you do not name a beneficiary, policy benefits will be paid in the following order: to your spouse, if living; if not, to your children in equal shares, if living; if not, to your parents in equal shares, if living, if not; to your estate.

For Spouse Optional Term Life insurance, you may designate a beneficiary. If no beneficiary is designated, the employee will be the default beneficiary for this coverage. If the employee is no longer living, the benefits will be paid to the estate of the Spouse.

For the Optional Child Term Life rider, the employee is automatically the beneficiary. If the employee is no longer living, the benefits will be paid to the estate of the Child.

Check your beneficiary(ies) regularly

Over time, events such as marriage, divorce, birth/adoption of children, or the death of a loved one may dramatically change the intent of how you want your life insurance benefit paid.

To designate or update your beneficiary, please log in to www.LifeBenefits.com/StateofTN using your ID and password provided on p. 10. You may also contact Minnesota Life directly at 1-866-881-0631 to obtain a paper form.

This information is a general discussion of the relevant federal tax laws. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances.

What is a beneficiary?



What is proof of good health?

If an applicant chooses coverage that is not guaranteed, Minnesota Life will request completion of an Evidence of Insurability (EOI) form to determine if the applicant is insurable (a good risk). When providing EOI, the applicant will answer a few simple health questions and provide information on physical condition, height, weight, gender, and tobacco status (if applicable). Once submitted, a medical underwriter reviews the application to determine if the person meets our acceptance standards for the insurance requested. Evidence of Insurability can be completed online at www.LifeBenefits.com/StateofTN or via paper form. Paper forms are also available online or by calling Minnesota Life at 1-866-881-0631.

Is additional medical information required?

Many applications can be processed using only the health information provided on the EOI form. To complete the application process, a physical exam may be required. Exams are free of charge and can be done at the applicant’s home. The basic physical examination includes height, weight, pulse, blood pressure and a medical history questionnaire. The examination may include special testing such as a blood test, urinalysis and an EKG. The medical records are kept confidential, and information from the exam is not released to anyone else without the applicant’s consent. Once all information is received, it is promptly reviewed and the applicant is notified of the underwriting decision.

What is proof of good health?

To apply for new coverage or increase your current coverage when authorized, visit www.LifeBenefits.com/StateofTN. You can find out in 60 seconds or less if you’re approved. If you need an exam you can schedule it right on line!

About Minnesota Life

Minnesota Life is one of the

country’s largest group life insurers.*

We understand the important role

we play in the financial well-being

of the nearly six million employees

we insure nationwide.

We are considered among the

highest rated group life insurance

companies by the independent

rating agencies that analyze the

financial soundness and claims-

paying ability of insurance

companies. For more information

about the rating agencies and to see

where our ratings rank compared

to other ratings, please visit

www.securian.com/ratings.

* Leading writers of group life insurance based on 2011 insurance in force, as reported by A.M. Best in July 2012.

For assistance, go to www.LifeBenefits.com/StateofTN or call 866-881-0631. 15

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Documents

Optional Group Term Life Insurance Programinsurance.tennessee.edu/life_opt_term.pdf · Optional Group Term Life Insurance Program For Employees of the State of Tennessee What’s