Vice President for Human Resources

Term Life Insurance

Protection for those who depend on you.  

Administered by Minnesota Life. 

While employed at Purdue, you are covered by term life insurance. The amount of coverage varies, depending on your age and the option you select. Benefits are paid to your beneficiary in the event of your death from any cause. Minnesota Life will mail you instructions about designating your beneficiaries.  

If you have no additional term life enrollment or beneficiary designation on file with Staff Benefits at the time of your death, benefits equal to one and a half times your annual salary will be payable to your estate. This insurance has no paid-up or cash values and remains in force only while you are employed at the University (unless you choose to continue coverage after your leave, as explained later in this document).  

The University provides you with an amount of term life insurance equal to one and a half times your annual budgeted salary, rounded to the nearest $1,000. For 10-month staff, summer earnings are included, once the summer session ends.  

Basic employee term life  

• One and a half times annual budgeted salary 

• Not to exceed $500,000 

• You may choose to limit this employer-paid coverage to $50,000 for imputed income purposes.  

Options offering coverage greater than one and a half times your annual budgeted salary and coverage for your dependents, are available to you to purchase via payroll deduction. To determine how much additional coverage is available to you, and your cost for this increased insurance, check the information that follows.  

Additional employee term life options  

• You may elect one to eight times your annual salary (this is in addition to the coverage provided by Purdue) 

• Not to exceed $2,000,000 

• Without providing Evidence of Insurability (EOI), you may elect an even salary multiple of coverage that does not exceed three times your annual salary or $500,000, if you elect coverage during this initial eligibility period (31 days from hire) 

The rates for additional employee term life coverage are also based on tobacco use. You may enroll for coverage at non-tobacco rates, provided you have not used tobacco in any form during the past 12 months and are not currently using tobacco in any form. 

Rates for additional employee term life coverage  

Age .......... Tobacco Rate/$1,000/Month ........... Non-Tobacco Rate/$1,000/Month

Under 30 ...............$0.048 .................................................$0.027 

30-34 .....................0.066 ..................................................0.037 

35-39 .....................0.074 ..................................................0.041 

40-44 .....................0.084 ..................................................0.042 

45-49 .....................0.135 ..................................................0.067 

50-54 .....................0.222 ..................................................0.100 

55-59 .....................0.406 ..................................................0.185 

60-64 .....................0.548 ..................................................0.297 

65-69 .....................1.053 ..................................................0.572 

70 & over ................1.508 ..................................................0.962 

What is Evidence of Insurability?  

Evidence of Insurability (EOI) is required for coverage greater than that outlined above and/or coverage elected after this initial eligibility period. EOI is the underwriting medical review process used to determine an applicant's insurability under this plan, for coverage that is not guaranteed issue.  

In these instances, a letter will be mailed to the applicant providing directions for answering health questions online. A paper form will also be included, for use by those who do not have access to a computer.  

After the initial underwriting review, many applicants are approved or declined without the need for any additional information. In general, most of the applications Minnesota Life receives are completed without asking for further information. However, additional information is sometimes required to get a better understanding of an applicant's health. Additional information may include an applicant questionnaire, historical medical records, or a paramedical exam. 

Reductions in coverage  

Your basic University-provided insurance does not reduce with age; however, your amount of additional employee term life reduces at the following ages: 

• Age 65 — reduces to 65 percent of original coverage amount 

• Age 70 — reduces to 50 percent of original coverage amount 

• Age 75 — reduces to 25 percent of original coverage amount 

More detail  

University-provided insurance is effective with your first day at work. Coverage you elect that is guaranteed, as outlined above, is effective upon receipt of your enrollment form. Coverage requiring EOI is effective upon approval by Minnesota Life. 

At any time after your initial enrollment, you may request to have the amount of your term life insurance increased or decreased. If you want to reduce the amount of insurance, the request will be effective immediately. If you want to increase coverage after your initial enrollment period has ended, and you do not have a qualifying change in family status, EOI will be required. Minnesota Life will determine whether you can increase your coverage or not; however, you cannot be declined for coverage that is already in effect. 

If you have a qualifying change in family status (CIFS), you may increase your term life amount one salary multiple without EOI. The level increase must match your CIFS reason. To increase more than one salary multiple, EOI is required.  

Coverage portability  

If you leave University employment, you may be eligible to take employee-paid term life coverage with you and continue to pay premiums until age 70. This election must be made within 31 days of the date your coverage would otherwise terminate, and does not require EOI. 

You will pay Minnesota Life directly for this coverage. It's important to note that the premium rate on your portable policy will be higher than the rate you paid for coverage as an active employee. Below are the portability rates currently in effect. 

Current portability rates (subject to change as determined by Minnesota Life) 

Age Rate ..............$1,000/month

Under 30 ..............$0.10 

30 – 34 .................0.14 

35 – 39 .................0.15 

40 – 44 .................0.17 

45 – 49 .................0.25 

50 – 54 .................0.39 

55 – 59 .................0.72 

60 – 64 .................1.11 

65 – 69 .................2.14 

There are no non-tobacco rates for portable life insurance.  

Conversion privilege 

Any term life coverage you do not have the option to continue under the portability option may be converted to an individual policy under the conversion option. Ported coverage that terminates at age 70 may also be converted. This is coverage you can retain for the rest of your life. This election must be made within 31 days of the date your coverage would otherwise terminate, and does not require EOI. 

You will pay Minnesota Life directly for this coverage. It is important to note that premiums are higher than those paid as an active employee and under the portability feature, and may be higher than rates you might obtain by providing EOI through a direct insurance agent. Contact Minnesota Life for information about the current rates for conversion. 

The 31-day conversion privilege also applies to the reduction in term life coverage that occurs at ages 60, 65, and 70 while you are still working. If you die within 31 days of the date your coverage is reduced, the amount of coverage you carried before the reduction will be paid as the benefit.  

If you are interested in the portability or conversion options, contact Minnesota Life within 31 days of the date your coverage with the University ends or reduces.  

Accelerated or living benefit  

Purdue's term life insurance plan offers an accelerated benefit (sometimes called a living benefit) that allows terminally-ill people to tap into their life insurance proceeds while they are still living. Often the money is used to handle out-of-pocket medical expenses, but it may be used for any purpose.  

To qualify for the accelerated benefit, you must furnish proof to Minnesota Life that your life expectancy is 12 months or less. A doctor's certification will be required.  

The accelerated benefit equals one-half the amount of the insurance in effect or $250,000, whichever is less.  

Any amount received as an accelerated benefit is deducted from benefits paid to your beneficiary when you die.  

Imputed income  

Current tax law requires that the “imputed value” of any group term life insurance provided for you by your employer above $50,000 be reported on your W-2 form as taxable income. If you wish to avoid receiving employer-paid coverage in excess of $50,000, you may request during enrollment that your University-paid benefit be limited to $50,000. 

Imputed income only applies to Basic Term coverage above $50,000. It does not apply to any amount you elect for Additional Term Life coverage.  

If you elect to limit your benefit and later wish to increase your life insurance amount, you will need to provide Evidence of Insurability as required by Minnesota Life. 

The imputed income rates below are subject to change.  

Age ....................... Monthly Rate Per $1,000

Under 25----------------------- $0.05 

25-29---------------------------- .06 

30-24---------------------------- .08 

35-39---------------------------- .09 

40-44---------------------------- .10 

45-49---------------------------- .15 

50-54---------------------------- .23 

55-59---------------------------- .43 

60-64---------------------------- .66 

65-69--------------------------- 1.27 

70 and above---------------- 2.06  

An example