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R&I "Know Your Benefits" - August 30, 2011
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R&I "Know Your Benefits" - August 30, 2011

Hopefully, all members are aware that the FDX MEC Life Plan will be moving from Unum to ING on November 1, 2011. Within the next several months, all members will be receiving information regarding this change. As we explained in our previous article on the Basic Life insurance provisions of the CBA, we believe all members need to understand the benefits available to them before deciding on additional coverage. The purpose of this article is to provide a review of the Optional Life coverage available in the CBA and is not intended to replace the CBA, Pilot Benefit Book, or insurance policies.

Know Your Benefits - August 30, 2011

Hopefully, all members are aware that the FDX MEC Life Plan will be moving from Unum to ING on November 1, 2011.  Within the next several months, all members will be receiving information regarding this change.  As we explained in our previous article on the Basic Life insurance provisions of the CBA, we believe all members need to understand the benefits available to them before deciding on additional coverage.  The purpose of this article is to provide a review of the Optional Life coverage available in the CBA and is not intended to replace the CBA, Pilot Benefit Book, or insurance policies.

As you may have guessed, the Optional Life Insurance listed in Section 27.C is optional coverage you may purchase in excess of the Basic Life Insurance.  This insurance is available as listed in 27.C.2 in increments of $100,000 to $1,000,000 or 10 times the pilot’s basic annual salary (whichever is less).  This amount decreases by 8% per year from ages 65 to 69, after which there are no further reductions.  A pilot may purchase Optional Life Insurance coverage of $25,000 for his spouse, $5,000 for dependent children six months to age 19 (23 if a full-time student) and $1,000 for dependent children younger than six months (child must be alive at birth).  Unlike the Basic Life Insurance, the Optional Life Insurance coverage may be decreased at any time throughout the year.  However, evidence of insurability is required to increase coverage.

The premiums for the Optional Life Insurance coverage are listed in the Pilot Benefit Book.  These rates are listed as “per $1000 dollars of coverage” in five-year age brackets.  Not surprisingly, costs increase with age.  Also, the spousal rates are higher than pilot rates in all age brackets.

A final provision worth discussing is when coverage ends.  Like the other provisions mentioned, when coverage ends is explained in full in the Pilot Benefit Book.  The Optional Life ends with termination or retirement.

If a pilot terminates before age 55, he may enroll in the Optional Life Portability Insurance Plan up to the lesser of the pilot’s pre-termination Optional Life coverage or $1,000,000 (not to exceed 5 times pre-termination salary).  The pilot may also purchase $25,000 for his spouse and $5,000 for his dependent children from ages 6 months to 19 (23 if a full-time student) provided the spouse had spousal coverage prior to the pilot’s termination.  Increases in coverage are not allowed after enrollment, but the pilot may reduce his coverage at any time.  Pilot’s coverage reduces to 60% at age 65 and then 50% at age 70.  Coverage terminates when the pilot attains age 80.  The Optional Life Portability Insurance rates are higher than for active pilots and can be reviewed in the Pilot Benefit Book.

If a pilot retires at or after age 55, he may enroll in the Retiree Optional Life Insurance Plan.  The pilot can elect coverage in increments of $100,000 to the lesser of the pilot’s pre-retirement Optional Life coverage or $300,000.  Also, the coverage limit decreases 8% per year from ages 65 to 69and terminates at age 80.  Finally, Retiree Optional Life Insurance rates are higher than for active pilots and can be reviewed in the Pilot Benefit Book.

In our next article, we will explain how to look up your coverage levels in the Basic and Optional Life Plans as well as the FDX MEC Life Plan.  This article will be maintained on the R&I Committee page of the fdx.alpa.org website for your reference.   In the weeks ahead, each member will have the opportunity to compare these benefits and our new policy with ING.  Hopefully each member will find this explanation helpful in that comparison.


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