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MSU Home :: Life Insurance

Life Insurance

Group Benefit Plan Booklet

Morehead State University will now provide a basic $50,000 group-term life policy as part of your benefit package. You are eligible to purchase an additional group-term life benefit at a rate of $.32/1,000 coverage. According to IRS regulations, you may exclude from taxable wages the cost of up to $50,000 coverage on group-term life insurance. If you exceed $50,000 in coverage, this may become taxable wages includible on the Form W-2. The IRS has determined the fair-market value of group-term life based on an employee’s age as of December 31 during the taxable year. The IRS fair-market value is less than MSU’s rate until you reach age 55 when you begin paying less than the IRS FMV rate. If you are less than 55 during the taxable year, you will not have a taxable fringe benefit. For those of you who will be 55 during the taxable year, the supplemental life you purchase through Morehead State’s group-term life plan at a rate of $.32/1,000 will hold a taxable value. If you are in the KTRS retirement system, you will not have to pay retirement on the fringe value and your taxes will be assessed each pay period. If you are in the KERS retirement system, you will have to pay retirement on the the fringe value. KERS retirement and payroll taxes will be assessed on the fringe at least annually and you will be notified when this will take place.

Supplemental life insurance is offered in increments of 1x (times), 1.5x, 2x or 3x an employee's annual salary, to a maximum of $300,000.00. During an open enrollment period, you may increase supplemental life insurance coverage by one level if you do not currently have this coverage. Medical underwriting approval is required if you wish to increase more than one level. It may be necessary for you to have a physical examination at your cost. Additionally, you may elect dependent coverage during an open enrollment period if you do not currently have this coverage. Dependent coverage options are $10,000 ($10,000 on spouse and $5,000 on all dependent children) and $20,000 ($20,000 spouse, and $10,000 dependent children).  You must be enrolled in supplemental life insurance to be eligible for $20,000/$10,000 dependent plan.

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