Term Life Insurance

Purdue's life insurance program is administered by Minnesota Life.  For information about the term life insurance benefit, view Chapter 13 of the online Insurance and FSA video. 

Imputed Income on Life Insurance

Internal Revenue Service regulations require that the imputed value of term life insurance in excess of $50,000 be reported on the employee’s W-2 form as taxable income.  Applicable Social Security, federal, and state taxes based on the imputed value of your coverage will be withheld each payday. 

Imputed value is determined from the following IRS table. The table gives the monthly imputed income rate per $1,000 of term life coverage over $50,000.

Rates are based on your age as of December 31 and are subject to change.

Any premium you pay for your term life insurance is subtracted from imputed income. The imputed income is not the amount of extra tax you will pay, but rather it simply increases the total amount of your taxable income. For instance, if you are in the 28 percent tax bracket and your imputed income is $84, your additional tax is $23.52 ($84 x .28).