What is Life Insurance and Accidental Death and Dismemberment?
Life and Accidental Death and Dismemberment (AD&D) insurance issues a benefit payout upon your loss of life, loss of limb, eyesight, hearing, etc.
What is the coverage amount?
The coverage amount will depend on the offering of your employer’s choosing. To view coverage details, visit You > Benefits > Ancillary Benefits in your Justworks account.
How do I add beneficiaries to my policies?
You can add your elected beneficiary or beneficiaries to your policy by selecting the Beneficiaries link in the Benefits > Ancillary Benefits section of your Justworks account. You are able to make changes to your beneficiaries at any time.
Policy effective and terminated date
Coverage will always begin on the first day of the month following your start date.
If you leave your employer or are terminated, your coverage will terminate at the end of the month in which you leave your employer.
How does offering Life Insurance affect my taxes?
The first $50,000 of group-term life insurance coverage provided under an employer-paid policy is tax-free. There are no tax consequences if the total amount of policies does not exceed $50,000. However, when group term life insurance exceeds $50,000 for an employee, the employee will need o report the value of coverage in excess of $50,000. The imputed value of this excess amount is also subject to Social Security and Medicare taxes.
Since Life and AD&D Insurance is 100% employer paid, on your invoice, there will be an additional section on your invoice called “Employee Deductions” if the coverage amount exceeds $50,000. We will include the cost of the coverage as earnings for your employees and then remove the cost of coverage as an Employee Deduction. There is no impact on your employees and they will not be paid any additional amounts. his process lets us properly report the value of coverage in excess of $50,000. If you have any further questions about your invoice, please contact email@example.com.
Read more about group term life insurance on the IRS’ website here.
In the event your company terminates their relationship with Justworks or an employee terminates their relationship with your company, employees have the option to continue their Supplemental Life Basic Life & ADD insurance policies through portability or conversion. MetLife partners with Barnum Financial Group to help in this process.
Within 31 days of leaving Justworks, Barnum Financial Group will contact employees with information on how they can continue their existing policies if they so choose.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.