Death Before RetirementDeath Before Retirement

-The Facts-

Meet BillMeet Bill

• Age 52

• BYU Faculty for 20 years

• $54,000 Salary

• $4,500/month

Meet Bill’s FamilyMeet Bill’s Family

• Spouse is 49 years old

• Three children, ages 22, 18, and 15

During a church basketball game the unthinkable happens . . .

What income is available for What income is available for Bill’s family?Bill’s family?

Life Insurance PayoutLife Insurance Payout

Paid to beneficiary (spouse) – no taxes

• Group Term Life $50,000

• Supplemental GTL 6 x salary =

$360,000

SavingsSavings

• Estimated Accumulations– 3% salary increases– 5% savings + 4% match– 20 years

Total = $169,339• Transferred to primary beneficiary

(surviving spouse)

Master Retirement (MRP)Master Retirement (MRP)Qualified Joint Survivor Annuity (QJSA)

if taken at employee’s age:

Age 55 (first available) Age 65

63% for additional years 100% no additional years

95% for two-life 95% for two-life

50% for spouse 50% for spouse

$381.19 $605.06

Social SecuritySocial Security

Death Benefit $255

Spouse caring for child until dependent turns 16

$1,218/month

Child benefit from age 16 to 18 or until high school graduation

$1,218/month

Family maximum $2,848/month

Social SecuritySocial Security

Option 1

Age 60

Option 2

Age 66

Retirement Benefit $1,161/mo. $1,624/mo.

What benefits are available for What benefits are available for Bill’s family?Bill’s family?

Family Medical/Dental InsuranceFamily Medical/Dental Insurance

• Medical/Dental Insurance provided at no cost for a one-year period

• Changed to name of surviving spouse

• Dependent coverage during year limited to age 26, marriage, or employment with insurance

Family Medical/Dental InsuranceFamily Medical/Dental Insurance

• After one year of coverage:– Because Bill has twenty or more years of MRP

benefit credit:• Coverage continues and BYU pays its full part

Family Medical/Dental InsuranceFamily Medical/Dental Insurance

• If after one year of coverage:– Bill had more than ten years, but less than

twenty years of MRP benefit credit:• Coverage may continue and premiums are prorated

Family Medical/Dental InsuranceFamily Medical/Dental Insurance

• If after one year of coverage:– Bill has less than ten years of MRP benefit

credit:• Spouse and dependents are not eligible for

continuing coverage

• COBRA is an option for up to 36 months

Family Life Insurance CoverageFamily Life Insurance Coverage

Before After

Surviving Spouse

$2,000 GTL

$200,000 SGTL$5,000 SGTL

Dependents$2,000 GTL

$10,000 SGTL$5,000 SGTL

Family 24-Hour AD&DFamily 24-Hour AD&D

Before After

Employee 0 to $400,000 -0-

Spouse 0 to $160,000 -0-

Dependents 0 to $20,000 -0-

Tuition for SpouseTuition for Spouse

• Full-time benefit continues

• Benefit not extended to new spouse and step children if new marriage

Tuition for DependentsTuition for Dependents

• Changes from ½ tuition to full tuition

• Benefit continues if accepted to BYU-Provo or BYU-Idaho until the child:– Obtains a Bachelor’s Degree from any

university or college or– Completes 152 semester hours at BYU or– Reaches Age 30

Strategy for Use of BenefitsStrategy for Use of Benefits

Group Term Life $50,000

• Pay burial expenses

• Pay other family debts

Spouse’s Monthly IncomeSpouse’s Monthly IncomeMoney invested at 6% or single

premium life annuity paying at 6%

SGTL $360,000 $1,800

Thrift $169,339 $847

Total $529,339 $2,647

Social Security

Social Security for Spouse until child is age 16

$1,218

Additional Monthly IncomeAdditional Monthly Income

Option 1 Option 2

MRP At age 52 $381 At age 62 $605

Social Security Retirement

At age 60 $1,161 At age 66 $1,624

What if Bill had been age 55?What if Bill had been age 55?

Not Retired Retired

Life Insurance $410,000 $12,000

Master Retirement $470/mo. $871/mo.

• Take time to review your benefits package– Make sure your beneficiaries are updated

• Increase your life insurance if necessary

• Obtain a projection from Social Security

• Increase your savings if possible

ChallengeChallenge

Your family will thank you.

Representations made in this presentation are for educational purposes and should not replace an individual, personal consultation with your BYU benefits counselor or DMBA representative.

Questions?Questions?