Exempt Employee Life Insurance Benefits
The State of Ohio provides certain exempt employees who have more than one year of continuous State service with basic term life insurance benefits, through Securian Financial, a policy underwritten by Minnesota Life. Life insurance is designed to provide financial help to your family should you die unexpectedly, which typically replaces approximately one year of income that would have been generated by your job.
As an exempt State employee, your basic life insurance is provided to you at no cost and with no evidence of insurability. As an exempt State of Ohio employee, it is your responsibility to review and understand the details of your basic life insurance coverage.
Key points about your life insurance policy
1. The amount of life insurance is equal to one times the employee’s annualized rate of pay, rounded up to the next closest $1,000.
2. If you are eligible for basic life insurance as an exempt employee and have a spouse that is also a State of Ohio employee, you cannot be covered as a dependent under his or her life insurance coverage.
3. There is no cash value or surrender value under this policy.
4. In the event of death while performing normal State of Ohio job duties, in addition to the basic life benefit, beneficiaries may be eligible to receive one times the employee’s annualized rate of pay under the accidental death provision of the policy.
5. The policy also includes a dismemberment benefit, while performing normal State of Ohio job duties, which can provide a portion of the death benefit to the employee for the loss of vision, hearing, a limb or other covered loss.
6. Enrollment in the plan is automatic. Employees simply need to designate a beneficiary when they are notified they have become eligible for the plan. Coverage is not available under this plan for spouses or dependent children.
7. Eligibility for the plan ends on the last day of the month in which you cease to be employed by the State.
8. Conversion to an individual policy is an option when you leave State service. However, you must enroll in a policy within 45 days of the end the month in which your employment with the State ends or within 45 days from the date of the conversion letter you receive from Securian Financial, whichever is later.
How Much Coverage Do I Have?
The benefit amount provided is:
An amount equal to your annualized rate of pay rounded to the next highest thousand. Annualized rate of pay is computed based on:
The IRS requires you to be taxed on the value of employer-paid group basic life insurance coverage exceeding $50,000, known as “imputed income.” This amount is based on the chart below and is reported to the IRS in Box 12 of your W-2 form. The imputed income bracket is based upon your age on the last day of your tax year and increases in five-year increments as you grow older.
Accelerated Death Benefits
If you have been diagnosed with a terminal illness and according to a physician, have less than 12 months to live, accelerated death benefits allow you to take a cash advance of a portion of your total life insurance benefit. You can request up to 100 percent of the life policy amount.
Basic life insurance is provided to:
Continuous State service means the uninterrupted service in which an employee is paid directly by warrant of the director of budget and management where no break in service occurs. The following qualifications apply:
A beneficiary is a person(s) or financial institution (i.e. trust fund) named in an insurance policy as the recipient of the funds in the policy in the event the policyholder dies. You may also want to name a secondary or “contingent” beneficiary, in case you outlive the first beneficiary. Proceeds of a life insurance policy are typically tax-exempt with the exception of any interest earned.
If you do not name a beneficiary or none of your beneficiaries survive you, equal payment is made to the first of the following:
1. Your spouse;
2. Equal shares to your children;
3. Equal shares to your parents;
4. Equal shares to your sisters and brothers; or
5. Your estate.
If there is no living beneficiary, the proceeds will be paid to your estate and will have to go through probate proceedings, resulting in a possible delay before your family receives the proceeds. If the proceeds go into the estate, these proceeds may be subject to estate taxes.
When you become eligible for basic life insurance, you should receive a letter and beneficiary form in the mail from Securian Financial that you can complete and mail directly to Securian Financial. You also can designate your beneficiary online at lifebenefits.com. The beneficiary form also can be printed off the Employee Benefits website under the forms section of the website. The beneficiary form lets you name the beneficiary of your basic life insurance policy.
Note: If you have both basic and supplemental life insurance with Securian Financial, the beneficiary you designate for one of the policies will be the same beneficiary for the other policy. Whichever beneficiary you designate last will apply to both policies. Therefore, it is not possible for you to have a different beneficiary for each of the policies.
You may change your beneficiary at any time by completing a new Beneficiary Designation Form, or online via the Securian Financial website at lifebenefits.com. The change is not effective until it is recorded by Securian Financial. Once recorded, it will take effect as of the date the form was signed, or the date the beneficiary designation was made online. However, if a death occurs before the change request was received, payments already made will not be altered.
State of Ohio Term Life Basic Certificate
Conclusion of Coverage
Coverage under your basic life insurance policy will terminate at the end of the month in which you separate from State service.