Basic Life Insurance
Loyola University automatically provides you with Basic Term Life Insurance equal to 1½ times your annual salary, with maximum of the lessor of one-half times annual salary or $500,000 for faculty (.80 FTE or higher) or staff (.50, .53 FTE or higher). Loyola University pays the entire cost of this coverage and the policies are administered through The Prudential Insurance Company of America (Prudential).
There are some tax consequences to employees with employer-funded insurance coverage over $50,000. As mandated by the IRS, coverage amounts in excess of $50,000 are subject to imputed income whereby the excess amount of the life insurance coverage is subject to federal income and Social Security (FICA) taxes. The taxable amount is included in your W-2 and is calculated using an IRS age-based table. If you wish to limit your life insurance coverage to a $50,000 maximum, you will not be subject to the excess tax. To do this, you must complete a waiver form obtained from the Human Resources office. However, please understand that if you elect to limit your life insurance to $50,000 and later wish to reinstate your coverage amount to the original 1½ times your salary, or increase any other life insurance coverage, you will need to complete an Evidence of Insurability form, which may include a physician’s certification of good health (See Evidence of Insurability). For more information, please contact the Human Resources office.