Group Term Life
Group Term Life is an optional insurance program that almost half of TCDRS employers offer to their employees.
To find out if your employer participates in this program, talk to your human resources department or sign into your TCDRS account online.
Under this program, your beneficiary will receive a one-time payment of your yearly salary or wages if you happen to pass away while you’re still employed. Some employers also provide Group Term Life coverage for retirees. Retiree coverage provides your beneficiary a $5,000 life insurance benefit.
This benefit covers you as long as you’re making deposits into your TCDRS account. It provides your beneficiary with a one-time payment equal to your annual salary or wages. Your beneficiary may also choose to send the money directly to a funeral home, hospital or other organization to help pay for expenses.
The Group Term Life program also provides you with extended coverage if you’re unable to work. However, it applies only if you pass away within two years of your last TCDRS deposit. Under extended coverage, your beneficiary will get a one-time payment of your last annual salary or wages. To claim the benefit, your beneficiary must prove that you were unable to work due to illness or injury. They could also make a claim if you were on leave under the Family and Medical Leave Act (FMLA).
Taxes on Premiums
Your employer pays the premiums for this program, and under federal tax law, the premiums are considered a type of income for you.
If you make less than $50,000 annually, your premiums are tax-free.
If you make more than $50,000 annually, you are required to pay taxes on some of your coverage. Your employer puts this amount on your W-2, so you can report it when you file your income tax return.
Any beneficiaries you name for this program will not have to pay income taxes on the money from this coverage.
Naming a Group Term Life Beneficiary
To name a beneficiary, sign in online or complete the Group Term Life Beneficiary Designation (TCDRS-51) form and return it to TCDRS. You may name the same beneficiary as you’ve designated for your TCDRS account, or you may designate another person. You can change your beneficiary at any time.
If we don’t have a beneficiary for you on file at the time of your passing, we'll make the payment to the beneficiaries on your TCDRS account.
Get more information on why TCDRS is a model plan when it comes to retirement.