Group Life Insurance

Definitions					Conditions
Optional Life Insurance					Termination/Retirement

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The purpose of this benefit is to assist your beneficiary, in the form of a lump sum payment, in the event of your death while employed at McMaster University.

Basic coverage is provided by the University to all eligible staff. Optional coverage is fully paid for by the employee. All rates are subject to change based on the experience of the Plan and the demographics of the group being covered.

Basic Coverage is 175% of your annual salary* (maximum coverage of $175,000). Evidence of insurability is not required for enrolment in this mandatory benefit and McMaster pays the entire premium. The premiums paid are a taxable benefit.

Optional Coverage ranges from 25% to 1,000% of your annual salary* (maximum coverage of $1,000,000). Employees applying for optional life insurance coverage are required to provide evidence of insurability. The entire premium is paid by the employee and is based on your age, gender, and smoking status.

The need for life insurance is unique for each individual and depends on your financial and personal needs. For example, a person with a large mortgage and young children might require more life insurance than someone who has only a small or no mortgage and whose children are grown up. Depending on your needs, you may decide to apply for a higher level of coverage while you are younger and fall under a lower rate level. You may decrease your coverage at any time as you age and as your needs change.

*[For benefit purposes, salaries are limited to $100,000 and if the salary is not an even $1,000 it will be raised to the next higher $1,000.]
 

CONDITIONS OF GROUP LIFE INSURANCE

1. Coverage under this Plan is available from the date of employment. The Basic Coverage is effective from the date of employment. Application for enrolment in optional coverage or for an increase in optional coverage is subject to the submission of Evidence of Insurability'. This may include a medical examination at your own expense and such evidence must be acceptable to the insurance company before coverage is approved.

 
2. A person leaving the University may, without medical examination, convert his/her Group Life Insurance to an individual policy, at regular rates, with the Sun Life Assurance Company of Canada, provided that application is made to the Company within 31 days of the termination date.

 
3. The University's contribution towards your Group Life Insurance is a taxable benefit.

 
4. Participation in basic group life and option life plans will continue until December 1st of the calendar year in which the individual reaches age 69.  After which time, individuals will be eligible to receive the retiree group life benefit which is a $5,000 lump sum policy.

 

SAMPLE CALCULATION OF PREMIUMS UNDER THE OPTIONAL LIFE INSURANCE PORTION
A female employee, age 37 and a non-smoker, has elected Optional Life Insurance of 200% of annual salary. Her annual salary is $69,600. Annual Salary (rounded to the next higher $1,000) = $70,000. $70,000 x 2 = $140,000 total coverage Rate per $1,000 = $0.04 (from rate table below). Total Monthly Premium: $140,000/$1,000 x $0.04 = $5.60 + 8% PST (an 8% Provincial Sales Tax applies to all premiums paid to employee benefit plans)

ON TERMINATION/RETIREMENT
Coverage ceases at the date the individual ceases to work at the University.

Employees at termination may elect to convert their life insurance coverage up to a maximum of $200,000. This can be done without submitting any "evidence of insurability". Please note that coverage would likely be less expensive if "evidence" is provided. If Life Insurance is an important issue and you will need to or wish to maintain coverage after you leave McMaster, we would recommend you review coverage provided elsewhere to ensure your long term financial needs are met.

At retirement, an individual is provided with a $5,000 Life insurance policy. If the individual is retiring on or after her/his Rule of 80 date, the individual may elect to continue his/her lump sum coverage up to age 65. Coverage under the Optional programme may not be continued beyond the individual's termination/retirement from the University.

This statement does not fully describe the Group Life Insurance Plan. Details of the Plan are found in the laws and legal documents on which the Plan is based. The information herein is subject to these legal documents which will govern in case of difference or error.

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MUFA - pdk
April 2012