supplemental life and voluntary term life insurance deductions

Based on a completed enrollment application provided by an employee, an agency originator will complete an Employee Voluntary Deduction action in IPOPS.  Employees may also purchase additional life insurance for their spouse and qualifying children, as long as the employee coverage is established and the dependent coverage does not exceed the employee's coverage.  For questions relating to coverage, contact the Office of Group Insurance.
 
Note:  To be eligible for Voluntary Term Life Insurance, employees must be eligible for basic life insurance provided by the state. 
 

Supplemental Life Insurance Coverage

  • The Supplemental Life insurance deduction (430) has been grandfathered in and can only be modified by the Office of Group Insurance. If a new Voluntary Term Life deduction is processed, the 430 deduction will automatically be turned off.    
  • The coverage amount for the employee can only be 1 times the employee's annual equivalent salary.

 Voluntary Term Life Insurance Coverage 

  • The coverage amount for the employee can be 1, 2 or 3 times their annual salary, with a minimum coverage of $20,000 and a maximum coverage of $500,000.
  • Spouse coverage can be $10,000, $20,000, $30,000, $40,000 or $50,000, as long as their coverage does not exceed the employee's coverage.
  • Children coverage is $10,000 for each qualifying child.  The premium rate is $2.00, regardless of the number of children covered. 

Supplemental Life and Voluntary Term Life Insurance Calculations

  • The Supplemental Life insurance and Voluntary Term Life insurance deductions have a monthly premium that is calculated based on the employee's annual equivalent salary (AES), rounded to the nearest thousand, and the employee's age as of July 1st. When calculating the spouse premium, the employee's age will be used. 
  • Insurance rates and factor amounts are provided by the Office of Group Insurance. New rates are effective the first pay date in August.
  • To calculate Supplemental Life insurance - round the employee's annual equivalent salary up to the nearest thousand, multiply that number by the monthly premium charge associated with the employee's age (as of July 1st of the current Fiscal Year) and divide by 1000.
  • To calculate Voluntary Term Life insurance - round the employee's annual equivalent salary up to the nearest thousand, multiply that number by the deduction indicator (410 = 1, 411 = 2 or 412 = 3), divide that number by 1000, and multiply that number by the monthly premium charge associated with the employee's age (as of July 1st of the current Fiscal Year).

 

These deductions use:

App Code 1 - pay group 01 employees

App Code 3 - pay group 20 employees

 
 
Age Factor
5-year age increments Monthly Premium per $1,000 of coverage
35 and Under     .07
36 Thru 40     .11
41 thru 45     .16
46 Thru 50     .26
51 Thru 55     .41
56 Thru 60     .75
61 Thru 65     1.01
66 Thru 70     1.55
71 Thru 75      2.23
76 Thru 80     3.35
81 Thru 85     5.00


 

Based on the Supplemental Life Insurance coverage selected by the employee, the following deduction can be added: 


 

Deduction  Description
430 Principal Mutual-Life Supplemental Insurance 1x Salary

 


 
Based on the Voluntary Term Life Insurance coverage selected by the employee, the following deductions can be added.  If coverage has been selected for the employee, spouse and children, there will be three deductions established.
 
Deduction  Description
410 Employee Voluntary Life Insurance 1x Salary
411 Employee Voluntary Life Insurance 2x Salary
412 Employee Voluntary Life Insurance 3x Salary
413 Spouse Life Insurance $10,000
414 Spouse Life Insurance $20,000
415 Spouse Life Insurance $30,000
416 Spouse Life Insurance $40,000
417 Spouse Life Insurance $50,000
418 Child Life Insurance $10,000
 
 

Voluntary Term Life Insurance Calculation Examples:

Employee with 1× coverage.  No spouse or child.  Annual Salary Rounded < $20K.
AGE Annual Salary Rounded Rate 903 DIR based on age Employee Coverage Spouse Coverage Child Coverage
39
 
$15K
*20K Minimum
.11 410 (×1) 0 0
Calculation is $20K ÷ 1000 = 20.00 × .11 = $2.20
Deduction Amount = $2.20
 
*If an employee's annual salary is less than $20,000.00, the minimum coverage amount will be calculated using $20,000.00.

 

 
Employee with 2× coverage.  No spouse or child.  
      
AGE Annual Salary Rounded Rate 903 DIR based on age Employee Coverage  Spouse Coverage Child Coverage
 49
 
$38K .26 411 (×2) 0 0
 
Calculation is $38K × 2 = $76K ÷ 1000 = 76.00 × .26 = $19.76
Deduction Amount = $19.76
Employee with 3X coverage. No spouse or child.
AGE Annual Salary Rounded Rate 903 DIR based on age Employee Coverage Spouse Coverage Child Coverage
 38
 

$179K

**$500K Maximum

.11 412 (×3) 0 0
Calculation is $179K × 3 = $537K  $500K ÷ 1000 = 500.00 × .11 = $55.00
Deduction Amount = $55.00
**The following message will be displayed when an employee's annual salary x three equals more than $500,000.00.
 

 

 
Employee with 1× coverage, spouse with 3x coverage and 1 child.
 
Spouse and child benefits cannot exceed 100% of the employee's coverage.  In the scenario below, the spouse coverage can only go up to $30K because the employee is coverage is $36K.

 
Deduction 410  (1x) - 415  (30K)  -  418  (10K)
 
AGEAnnual Salary RoundedRate 903 DIR based on ageEmployee CoverageSpouse CoverageChild Coverage
48
 
$36K.26410 (×1)415 (30K)418 (×1)
 
Employee Calculation is $36K × 1 = $36K ÷ 1000 = 36.00 × .26 = $9.36
Spouse calculation is $30K ÷ 1000 = $30.00 × .26 = $7.80
Child premium is $2.00

 

If spouse coverage was deduction 417 $50K, the following error message would display.

 

 
 
Possible error messages are shown below:
 
An employee must be eligible for basic life insurance.


 

 
A Voluntary Term Life Insurance plan (410, 411, or 412) must be set up for an employee before any coverage can be established for a spouse or child.