You may also select Employee Supplemental Life Insurance. This coverage is in addition to your basic employee life insurance. Go to Benefits Enrollment Worksheet for the coverage levels available to you.

Taxation of Group Term Life Insurance

The Internal Revenue Service (IRS) provides that the first $50,000 of group term life insurance coverage does not result in any gross income for federal income tax purposes. Amounts in excess of $50,000 are taxable: the cost of the group term life insurance on an employee's life provided under a policy carried directly or indirectly by an employer, less any employee contributions for the whole amount of group term life insurance, is considered gross income of the employee. The cost of the group term coverage for such purposes is based upon uniform premiums established by the IRS. The calculation of the taxable amount is called imputed income.

The following is an example of how imputed income is derived. The formula is based upon an individual who makes $60,000 per year and who elects supplemental coverage at one times his/her salary. The employee is 40 years old.

Basic Life Insurance Coverage	$60,000	Provided by an employer
Supplemental Coverage	$60,00	Coverage amount
Total Coverage	$120,000
Less $50,00 exclusion	- $50,000	IRS Section 79 exclusion
Balance	$70,000	Coverage for Section 79 purposes
Section 79 cost	$XXX.XX	$XX.XX per month (70 units x $.XX per month)
Less employee contribution	-$XXX.XX	$XX.XX per month (60 units x $.XX per month)
Imputed Income	$X.XX	Or $.XX per month, $.XX per pay period