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Accelerated life benefit

This section is applicable to you if you have only Basic Group Term Life Insurance. If you have Optional Group Term Life Insurance, see the Description later in this section for details of this benefit. You or your court appointed legal representative may request payment to you of your Basic Group Term Life Insurance amount in a single lump sum. You must be diagnosed with a Terminal Condition and have a life expectancy of twelve months or less. We will review the request and evaluate whether the requirements for this benefit are met. If approved, we will make payment to you. The amount of the payment will reduce your Basic Term Life amount to zero and there will be no benefit payable in the event of your natural death. The Accelerated Life Benefit is not available to you if you retired prior to January 1, 2000 unless you were determined, in a written statement executed before the day you retired by your attending physician, to have had a Terminal Condition. You may contact our Customer Service at (877) 494-1716 for additional information.

This section is applicable to you if you have Optional Group Term Life Insurance coverage. If you have only Basic Group Term Life Insurance coverage, the Step-by- Step Instructions for Filing an Accelerated Life Benefit Claim and the description of the Accelerated Life Benefit for Basic Group Term Life Insurance Only are applicable to you.
You or your court appointed legal representative may request payment in one lump sum to you of up to 80% of your total Group Term Life Insurance amount which is the sum of your Basic Group Term Life Insurance (which you have if you have health coverage through the Group Benefits Program) and your Optional Group Term Life Insurance amounts. You must be diagnosed with a Terminal Condition and have a life expectancy of twelve months or less.

We will review your request and evaluate whether the requirements of this benefit are met. The minimum payment will be $2,500 and will be made by us to you or your legal representative. The amount of the payment will be deducted from your Optional Group Term Life Insurance amount. However, you will continue to pay the premium for the Optional Group Term Life Insurance coverage as if the Accelerated Life Benefit payment had not been made. The amount of Optional Group Term Life Insurance that will be paid to your beneficiary when you die will be reduced by this Accelerated Life Benefit payment. The Accelerated Life Benefit is not available to you if you retired prior to January 1, 2000 unless you were determined, in a written statement executed before the day you retired by your attending physician, to have had a Terminal Condition.

Note: If you are diagnosed with a Terminal Condition, you may elect to receive payments under the Accelerated Life Benefit or Life Settlement Contract Option, but not both. Please review your situation carefully before making your selection.

DISCLOSURE: The Accelerated Life Benefit offered under your Group Term Life Insurance coverage is intended to qualify for favorable tax treatment under the Internal Revenue Code of 1986. If the Accelerated Life Benefit qualifies for such favorable tax treatment, the benefits will be excludable from your income and not subject to federal taxation. Tax laws relating to the Accelerated Life Benefit are complex. You are advised to consult a qualified tax advisor about the circumstances under which you could receive the Accelerated Life Benefit excludable from income under federal law. Receipt of the Accelerated Life Benefit payment may affect your or your Dependents’ eligibility for public assistance such as medical assistance (Medicaid), Aid to Families with Dependent Children (AFDC), Supplementary Social Security  Income (SSI), and drug assistance programs. You are advised to consult with a qualified tax advisor and with social service agencies concerning how receipt of such payment will affect your or your Dependents’ eligibility for public assistance.

For more information please see the Retirees Employees Benefit Book.

Conversion privilege

Conversion for you

You may convert your Group Term Life Insurance (both Basic and Optional amounts) to an individual life insurance policy to be issued by us if you are no longer eligible for these coverages. Life Evidence of Insurability is not required if you apply for the individual life insurance policy and pay the first premium within 31 days after your group coverage ends.
If at retirement you continued Election 1 or 2 Optional Group Term Life Insurance, you may reduce the coverage to a lower level. Any amount of Group Term Life Insurance coverage that you reduce may be converted to an individual life insurance policy issued by us. Life Evidence of Insurability is not required for the reduction or the conversion. Conversion is not available if your benefit was reduced because of an Accelerated Life Benefit or if you have received a Life Settlement Contract payment.
Once your Optional Group Term Life Insurance coverage amount has been reduced or canceled, it cannot be increased or reinstated. If you convert to an individual life insurance policy, the premium will cost more than for your group term life insurance premium.

Note: The individual life insurance policy is not term insurance.

If the Group Policy is discontinued, you may be able to convert to an individual life insurance policy (as described above), provided:

  • you were insured under the Group Policy when the Group Policy ends;
  • you were continuously insured under the Group Policy for at least five years before the Group Policy ends; and
  • your insurance under the Group Policy ends because the Group Policy has ended.

The individual life insurance policy will not be for an amount of insurance greater than the smaller of the following amounts:

  • the amount of your insurance under the Group Policy, minus the amount of any life insurance you are eligible for under any group policy issued or reinstated by us or by any other life insurance company within 31 days after the termination of the Group Policy; or
  • $2,000.

If you die within the 31-day period allowed for conversion, a benefit may be paid to your beneficiary. The amount paid will be the amount your beneficiary would have received if you had applied for conversion. This benefit may be paid, regardless of whether or not you applied for it.

Conversion for your covered spouse

Your covered spouse may convert his or her Dependent Group Term Life Insurance amount to an individual life insurance policy if:

  • your coverage ends for any reason;
  • you are no longer eligible for Dependents’ insurance under these coverages; or
  • you die.

Your covered spouse is not required to provide Life Evidence of Insurability if your spouse applies for the individual life insurance policy and pays the first premium within 31 days after group coverage ends. Conversion is not available if your spouse has
received a Life Settlement Contract payment. If your covered spouse converts to an individual life insurance policy, the premium will cost more than for your covered spouse’s group term life insurance premium.

Note: The individual life insurance policy is not term insurance.

If the Group Policy is discontinued or is changed to end coverage for Dependents, your covered spouse will be able to convert his or her Dependent Group Term Life Insurance to an individual life insurance policy (as described above), provided:

  • your covered spouse was insured under the Group Policy when the Group Policy ends;
  • your covered spouse was continuously insured under the Group Policy for at least five years before the Group Policy ends; and
  • your covered spouse’s insurance under the Group Policy ends because the Group Policy has ended.

The individual life insurance policy will not be for an amount of insurance greater than the smaller of the following amounts:

  • the amount of your covered spouse’s insurance under the Group Policy, minus the amount of any life insurance your covered spouse is eligible for under any group policy issued or reinstated by us or by any other life insurance company within 31 days after the termination of the Group Policy; or
  • $2,000.

If your covered spouse dies within the 31-day period allowed for conversion, a benefit may be paid to you. The amount paid will be the maximum amount your covered spouse could have converted. This benefit may be paid, regardless of whether or not you or your covered spouse applied for conversion.

For more information about this benefit, please see page 17 of the Retiree Employees Benefit Book.