Group Life Insurance
- How is the Group Life Insurance program administered?
- How do I become eligible for Group Life Insurance?
- How is the amount of coverage determined?
- What is the cost of coverage?
- What happens to my coverage when I retire?
- Will I have coverage while on leave without pay?
- Will my coverage continue if I terminate employment?
- What is the "Accelerated Death Benefit"
- Can I transfer ownership of my insurance coverage?
- How can I change my beneficiary information?
- Why should I worry about my beneficiary information?
- Is additional coverage available?
The Group Life Insurance Plan is administered by the Virginia Retirement System on behalf of its employers. VRS also administers service retirement and disability benefits for state employees, public school teachers and employees of participating political subdivisions. Minnesota Life is the provider for the Group Life Insurance benefit and for the Optional Life insurance benefit.
You are eligible for group life insurance benefits if you are a permanent, salaried:
- state employee,
- public school teacher,
- administrator, or clerical employee of a school division;
- an employee of a participating political subdivision, or
- a member of the support staff of a school board.
Employees who work on a temporary or wage basis are not eligible.
The amount of your life insurance coverage is equal to your annual compensation rounded to the next highest thousand, then doubled. Example: If your annual compensation is $25,300, it is rounded to the next highest thousand -- $26,000. When doubled, it is $52,000 -- that is your coverage for natural death. If your death is the result of an accident, the amount of your coverage is twice that for natural death. In the example above, the amount of your coverage for accidental death would be $104,000 ($52,000 doubled). You also have coverage if, through an accident, you become blind, or lose an arm or a leg. For the loss of one limb or the sight of one eye, you receive a payment equal to your annual compensation rounded to the next highest thousand. The maximum amount of dismemberment insurance paid for loss of two or more limbs or sight in both eyes is equal to the natural death coverage.
In many cases, the employer pays the premium for members. Otherwise, the premium may be automatically deducted from your compensation. Your employer can advise you of the current premium amount.
After you retire, your life insurance continues at no cost to you provided you meet the eligibility requirements under your retirement plan. The amount of your insurance reduces by 25 percent annually starting January 1 following 12 months of retirement, and on every January 1, thereafter, until your coverage reaches 25 percent of its value at your retirement. Reduction begins on the January 1 following the first 12 months from the date you separate from service if you are eligible to retire but defer receipt of your annuity. At its fully reduced level, you will have approximately one-half of your pre-retirement compensation in life insurance. If you have at least 30 years of creditable service, your coverage cannot reduce below $8,000. This minimum will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation.
If you have VRS group life insurance coverage, some basic benefits will continue after you retire on disability. Your coverage will begin to reduce by 25 percent beginning on the January 1 following one calendar year from your normal retirement age under your plan. It will continue to reduce by 25 percent each January 1 until it reaches 25 percent of its original value.
If you have at least 30 years of creditable service, your coverage cannot reduce below $8,000. This minimum will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation.
If you took either a service or disability retirement before July 1, 2001 you continue to have your basic group life insurance reduce 2 percent per month until it reaches 25 percent of its value at retirement.
Although accelerated death benefit and the right to voluntary irrevocable assignment continue into retirement, accidental death and dismemberment coverage cease.
You can continue life insurance coverage while you are on leave, including military leave, up to a total of 24 months if your premiums are submitted monthly through your employer.
Your group life insurance coverage ends when you leave your job before you become eligible for retirement. You may convert to an individual whole-life policy at non-group rates, however, by filing a Conversion of Group Life Insurance Enrollment (VRS35-E) that you may obtain from your employer or from Minnesota Life. The conversion must take place within 31 days of the last day of the month in which you terminate employment. Members who are eligible to receive a retirement benefit upon termination may not convert to an individual policy. Information on premiums and coverage for conversions can be obtained from the program's life insurance carrier, Minnesota Life. If you meet the age and service requirements to retire at the time you terminate employment, but delay your retirement, your life insurance remains in effect at no cost. The 25 percent annual reduction in the amount of your coverage begins the January 1 following the first 12 months from the date you separate from service. If you return to work under the same or another covered position, you again become eligible for coverage under group life insurance. The amount of your coverage is based on your new compensation. Any coverage you may have as a result of converting to an individual policy does not offset the amount of your coverage if you are re-employed in a covered position.
A provision of VRS' Group Life Insurance Program offers an additional benefit to you if you should suffer from a terminal illness. This life insurance provision provides an accelerated benefit if you have a terminal illness and are not expected to live longer than 12 months. You may withdraw any amount of your life insurance coverage, up to the entire amount, to use for any purpose. Any amount that remains in the plan would be paid as a benefit to your beneficiary. If you take the entire amount of your life insurance coverage, no benefit would remain for your beneficiary.
In certain limited cases, you may assign the ownership of your life insurance coverage to another person. This is referred to as Voluntary Irrevocable Assignment. Minnesota Life can provide you with the details of this benefit.
You may change your beneficiary at any time by requesting a Designation of Beneficiary (VRS-2) from your employer or from Minnesota Life. Be sure that your beneficiary understands the benefits under the group life insurance plan. VRS has the authority to recover any possible overpayment of benefits through the proceeds of life insurance coverage.
Keeping your beneficiary designation up-to-date will ensure that benefits are paid promptly and according to your wishes. Any time you have a change of family status such as birth, death, change in marital status or other event, verify your beneficiary designation and complete a new Beneficiary Change Form (VRS-2) if necessary.
If you have basic group life insurance coverage, you are also eligible for additional life insurance coverage for yourself, your spouse and your dependent children through the Optional Life Insurance Plan.