State Farm Insurance Companies Group Life and Accidental Death & Dismemberment Insurance Plan Summary Plan Description

Transcription

1 State Farm Insurance Companies Group Life and Accidental Death & Dismemberment Insurance Plan Summary Plan Description For United States Employees and Retirees Effective January 1, 2012 The Compensation Committee of the Board of Directors of State Farm Mutual Automobile Insurance Company, as the Plan Sponsor, fully intends to continue the Plan. Nevertheless, the Compensation Committee of the Board of Directors reserves the right, in its sole and unfettered discretion, to amend, modify or terminate the Plan at any time, in whole or in part, without the consent of plan participants and their beneficiaries. Only the Compensation Committee of the Board of Directors can modify or waive this reservation of rights.

2 TABLE OF CONTENTS INTRODUCTION... 6 WHO IS ELIGIBLE... 7 ELIGIBLE EMPLOYEES AND RETIREES... 7 ELIGIBLE DEPENDENTS... 7 IF YOU AND YOUR SPOUSE OR PARTNER ARE BOTH ELIGIBLE FOR STATE FARM GROUP LIFE... 8 DEPENDENT CHILDREN OF ELIGIBLE STATE FARM PARENTS... 8 WHEN COVERAGE BEGINS... 9 WHEN LIFE INSURANCE COVERAGE BEGINS FOR EMPLOYEES... 9 You Enroll Within 31 Days of Your Date of Hire... 9 You Fail to Enroll Within 31 Days of Your Date of Hire... 9 You Waive or Cancel Coverage... 9 You Are Not Classified as an Eligible Employee for Life Insurance... 9 Providing Evidence of Insurability for Employee Life Insurance... 9 Actively At Work Requirement for Employee Life Insurance WHEN AD&D INSURANCE COVERAGE BEGINS FOR ELIGIBLE EMPLOYEES WHEN LIFE INSURANCE COVERAGE BEGINS FOR ELIGIBLE DEPENDENTS You Enroll Your Dependents When You First Become Eligible You Fail to Enroll Your Dependents When You First Become Eligible YOU WAIVE OR CANCEL DEPENDENT LIFE COVERAGE You Acquire a Dependent Child Providing Evidence of Insurability for Spouse Life Insurance Actively At Work Requirement for Dependent Life Insurance NAMING A BENEFICIARY FOR EMPLOYEE LIFE INSURANCE EE SPD 2

3 ASSIGNING YOUR LIFE INSURANCE NAMING A BENEFICIARY FOR DEPENDENT LIFE INSURANCE GROUP LIFE INSURANCE BENEFITS TERMS USED IN THE BENEFIT SCHEDULES Schedule of Insurance - Full-time and Part-time Employees Schedule of Insurance Retired Employees If You Retire With Insurance of More Than $50, Retention of Life Insurance Upon Retirement Optional Retiree Group Life Insurance SCHEDULE OF BENEFITS FOR EMPLOYEES DEPENDENTS GROUP LIFE AND AD&D PREMIUMS PREMIUM RATES LIFE INSURANCE BENEFIT CHANGES CHANGE IN INSURANCE AMOUNT EXTENSION OF DEATH BENEFIT PROVISION FOR EMPLOYEES HIRED PRIOR TO JANUARY 1, Benefits Termination Total Disability Total and Permanent Disability Proof of Total Disability and Death Examination AD&D AND LOSS OF SIGHT BENEFITS WHEN AD&D DEATH BENEFITS ARE PAYABLE WHEN AD&D DEATH BENEFITS ARE NOT PAYABLE SCHEDULE OF AD&D AND LOSS OF SIGHT BENEFITS LOSS OF USE BENEFIT EE SPD 3

4 SEAT BELT BENEFIT WHEN DISMEMBERMENT OR LOSS OF SIGHT BENEFITS ARE NOT PAYABLE PHYSICAL EXAMINATION TERMINATION OF AD&D AND LOSS OF SIGHT COVERAGE WHEN COVERAGE ENDS WHEN LIFE INSURANCE COVERAGE ENDS FOR EMPLOYEES WHEN AD&D INSURANCE COVERAGE ENDS FOR EMPLOYEES WHEN LIFE INSURANCE COVERAGE ENDS FOR DEPENDENTS IF INSURANCE IS CONTINUED UNDER THE EXTENSION OF DEATH BENEFIT PROVISION CONVERTING YOUR LIFE INSURANCE COVERAGE Your Group Life Insurance Terminates Because of Your Loss of Eligibility Termination of the Group Life Insurance Plan Policy Termination of Your Group Life Insurance Because of Your Transfer When You Must Apply for Conversion Coverage Conversion and the Extension of Death Benefit Provision CONVERTING YOUR DEPENDENT LIFE INSURANCE COVERAGE CLAIM FILING AND APPEAL PROCEDURES HOW TO FILE A CLAIM HOW CLAIMS ARE PROCESSED PAYMENT OF A CLAIM DENIAL OF A CLAIM HOW TO APPEAL A DENIED CLAIM WHO TO CONTACT... Error! Bookmark not defined. ADMINISTRATIVE INFORMATION YOUR RIGHTS UNDER ERISA EE SPD 4

5 PLAN NAME PLAN ADMINISTRATOR EMPLOYER AND PLAN IDENTIFICATION NUMBERS ADDITIONAL INFORMATION APPENDIX: TERMS Actively at Work Company Service Dependent Employee Flex Dollars Military Service Partner Reemployment Rights Retirement Retirement Date Retirement Plan Spouse State Total Disability Total and Permanent Disability EE SPD 5

6 INTRODUCTION Life insurance coverage is an important part of the protection and peace of mind you can provide for your family. State Farm group life insurance for employees and retirees provides your beneficiaries a benefit in the event of your death. If you re covered for group life insurance, you can also choose to enroll your eligible dependent children and Spouse or Partner in dependent life insurance coverage. You re the beneficiary of this insurance if a covered dependent dies. If you are an active employee enrolled in group life, you are also covered by State Farm Accidental Death and Dismemberment (AD&D) insurance. (You cannot continue AD&D coverage into retirement.) This coverage pays you a benefit when you sustain certain injuries resulting from a qualifying accident. It pays your life insurance beneficiary a benefit if you die as a result of a qualifying accident. When you enroll for life insurance within 31 days of when you are first eligible, you do not have to provide evidence of insurability. This also applies to enrolling your existing eligible dependents. However, if you apply for coverage after 31 days of when you first become eligible for life insurance, you will need to provide evidence of insurability for yourself and for any existing dependents. Coverage can be applied for anytime thereafter by providing evidence of insurability. During the year, you may add a newly acquired child to existing dependent coverage, or apply for coverage for your first dependent child. You can enroll your Spouse or Partner in the plan when you marry. You can also drop dependent life insurance at any time. Each year during the annual enrollment period, you can drop life coverage for yourself and/or your dependents. However, evidence of insurability will be required if you want to apply at a later date. If your State Farm group life or dependent life insurance terminates under certain circumstances, you may be able to continue coverage under an individual policy at your expense. State Farm pays a portion of the monthly premium for your life insurance. Employees pay their portion of the premium with pre-tax (Flex) dollars. You pay the full monthly premium for your dependents life insurance. If you are a retired employee, you may be able to continue a level of life insurance (without AD&D coverage) into retirement. Depending on when you retired, you either contribute to the monthly premium or State Farm pays the premium. This summary plan description includes detailed information about when your life and AD&D and dependent coverage begins and ends, what to do if you have a family status change during the year, and what happens if you become disabled and cannot work. It also explains the benefits available under each type of coverage, how to name or change your beneficiary, and how claims must be filed. Refer to the Table of Contents to see the section that contains the information you need. Words that have a specific meaning are capitalized and are defined in Appendix C: Terms. If this summary plan description contains any statements that disagree with the Master Policy, the Master Policy will govern. If you need further information, you can call the State Farm Benefits Center at Hours of operation: 7am 6pm CT, Monday Friday 2012 EE SPD 6

7 WHO IS ELIGIBLE Eligible Employees and Retirees You are eligible to participate in the Employees Group Life Insurance Plan if you fall into one of the following classifications: A full-time United States employee who customarily works a standard workweek and customarily works 12 months in a calendar year. A part-time United States employee who customarily works an average of 18 or more hours per week per pay period and customarily works five continuous months or more during a calendar year. A retired United States employee who was covered under the Employees Group Life Insurance Plan before you retired and meets all the following requirements on the date of retirement: At least 55 years of age, Hired prior to January 1, 2012, Has five or more years of Company Service, and Receives immediate income from the State Farm Insurance Companies Retirement Plan for United States Employees upon retiring. Employees hired or rehired on or after January 1, 2007 and prior to January 1, 2012 must have 15 years of Company Service, at least age 55, and must elect immediate income from the State Farm Insurance Companies Retirement Plan for United States Employees upon retiring. NOTE: The term Employee as used throughout the rest of this summary plan description will include only those persons listed above. Employees of agents, employees of trainee agents and leased employees are not considered employees for purposes of this summary plan description. Eligible Dependents Your dependents are only eligible for dependent life insurance if you re covered under the Employees Group Life Insurance Plan. If you elect dependent life insurance for your children, all your eligible dependent children must be covered. You may be eligible to enroll any of the following as your dependent: 1. The Employee s Spouse or Partner, or 2. A child who is under 26 years of age, who is: a) The Employee s biological child; 2012 EE SPD 7

8 b) The Employee s legally adopted child (a child is considered legally adopted on the earlier of the date the child is in the Employee s custody pursuant to an interim order of adoption or the date the child is lawfully placed in the Employee s home for purposes of adoption); c) The Employee s stepchild whose biological parent is covered under the Plan; d) The Employee s foster child who is placed with the Employee or the Employee s Spouse or Partner by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction; or e) A child for whom the Employee and/or the Employee s Spouse or Partner is the court-appointed legal guardian. 3. The Employee's unmarried grandchild who is: a) In the care of the Employee pursuant to a court order of temporary custody; b) Under 26 years of age; c) Not on active military duty; and d) Meets the definition of dependent under Internal Revenue Code Section 152 (the Employee provides over one-half of the grandchild s support without regard to the earned income limit or the custodial rules applicable in divorce situations). If You and Your Spouse or Partner are Both Eligible for State Farm Group Life If you and your Spouse or Partner are both eligible for State Farm group life insurance, you may be covered as: An agent, employee or retiree as determined by your most recent status, and A dependent of your Spouse or Partner, provided your Spouse or Partner is covered as a State Farm agent, employee or retiree. Dependent Children of Eligible State Farm Parents If both parents are eligible for State Farm Group Life Insurance, and each parent separately enrolls in the Group Life Plan, you both may cover your eligible dependent children EE SPD 8

9 WHEN COVERAGE BEGINS When Life Insurance Coverage Begins for Employees You Enroll Within 31 Days of Your Date of Hire If you are hired on the first day of the month and complete the enrollment form within 31 days of the date you were hired, your life insurance coverage will begin on your date of hire. If you are hired after the first of the month and complete the enrollment form within 31 days of the date you were hired, your coverage will begin on the first of the month following the month in which you were hired. You Fail to Enroll Within 31 Days of Your Date of Hire If you enroll more than 31 days after your date of hire, evidence of insurability is required. Contact the State Farm Benefits Center for an application. If approved, coverage would begin on the first of the month following the date State Farm Life approves the application. You Waive or Cancel Coverage If you previously waived or canceled coverage under the State Farm Group Life Plan and want to enroll at a later date, evidence of insurability is required. Contact the State Farm Benefits Center for an application. You Are Not Classified as an Eligible Employee for Life Insurance If you are an employee who is not currently eligible for life insurance (for example, because of the number of hours you work per week), and you later become an eligible employee you can enroll for coverage. If you become eligible on the first day of the month and enroll within 31 days of your date of becoming eligible, your life insurance coverage will begin on your date of eligibility. If you become eligible after the first of the month and enroll within 31 days of your date of eligibility, your life insurance coverage will begin on the first of the month following the month in which you became eligible. Providing Evidence of Insurability for Employee Life Insurance When applying by evidence of insurability, you must complete an Individual Application for Group Insurance, and you may be required to have a medical examination at your expense. If approved, coverage will begin on the first of the month following the date State Farm Life approves the application EE SPD 9

10 Actively At Work Requirement for Employee Life Insurance If you are a Full-time or eligible Part-time Employee and you are not Actively at Work on the day your coverage would otherwise become effective, you will not become insured until the day following the date you again are Actively at Work. If you return to work following a military leave, you will be eligible for life insurance on the date you return to Active Work with that date considered to be the first workday of the month. When AD&D Insurance Coverage Begins for Eligible Employees AD&D insurance and loss of sight benefits automatically begin when your life insurance begins. When Life Insurance Coverage Begins for Eligible Dependents You Enroll Your Dependents When You First Become Eligible Your eligible Dependents (Spouse or Partner and/or children) life insurance coverage will begin when your life insurance coverage becomes effective. Evidence of insurability is not required. You Fail to Enroll Your Dependents When You First Become Eligible If you do not enroll your Dependents within 31 days of first becoming eligible and you want to enroll them at a later date, you must contact the State Farm Benefits Center. Spouse Life requires evidence of insurability. If approved, coverage will begin the first of the month following approval. Dependent Children can only be added during the next Annual Enrollment period (no evidence of insurability required). Remember, if you apply for dependent child coverage, you must apply for coverage on all your eligible dependent children. You Waive or Cancel Dependent Life Coverage If you previously waived or canceled dependent life coverage under the State Farm Group Life Plan and want to enroll your Dependents at a later date, contact the State Farm Benefits Center. Spouse Life requires evidence of insurability. If approved, coverage will begin the first of the month following approval. Dependent Children can only be added during the next Annual Enrollment period (no evidence of insurability required). Remember, if you apply for dependent child coverage, you must apply for coverage on all your eligible dependent children EE SPD 10

11 You Acquire a Dependent Child You Already Have Covered Children If you already have a child or children covered under the Dependents Group Life Insurance provision, any newly acquired dependent children will automatically be insured on the date you acquire them. Evidence of insurability is not required. The Actively at Work requirement does not apply in this case. You Acquire Your First Child If you acquire your first dependent child after your own life insurance is in effect, you must enroll him/her within 31 days of the date you acquire the child in order for your dependent s coverage to begin on the date you acquire him/her. Coverage is not automatic. To enroll your first dependent child, you must notify the State Farm Benefits Center within 31 days of acquiring the child. If you fail to enroll your first child within 31 days after the date you acquire him/her, you may enroll during the next Annual Enrollment period without evidence of insurability. Remember, if you apply for dependent child coverage, you must apply for coverage on all your eligible dependent children. Providing Evidence of Insurability for Spouse Life Insurance In order to provide evidence of insurability for a Spouse or Partner, you must complete the Individual Application for Group Insurance (dependent section), which can be obtained by contacting the State Farm Benefits Center. Your Spouse or Partner may be required to have a medical examination at your expense. Your Spouse s or Partner s coverage will begin on the first day of the month or the first of the next month following the date State Farm Life determines the evidence of insurability is satisfactory. Actively At Work Requirement for Dependent Life Insurance If you are a Full-time or eligible Part-time Employee and you are not Actively at Work on the day your Dependent s coverage would otherwise become effective, he/she will not become insured until the day following the date you again are Actively at Work. This requirement does not apply to a newly acquired dependent child when you already have a child or children covered under the Dependents Group Life Insurance provision. Naming a Beneficiary for Employee Life Insurance Naming Your Beneficiary When You Enroll You should name your beneficiary or beneficiaries at the time you enroll by completing an electronic beneficiary designation through the My State Farm Benefits Resource website. Changing Your Beneficiary You may change your beneficiary by completing an electronic beneficiary designation through the My State Farm Benefits Resource website. A change of beneficiary can only be made during your lifetime. The change will be effective on the date you complete the electronic designation EE SPD 11

12 Naming More Than One Beneficiary If you designate more than one beneficiary, but no respective interest is specified (for example, one receives 60% and one 40%), those beneficiaries will share equally, and the interest of any beneficiary who predeceases the Employee will pass to the survivors equally or to the survivor. If No Beneficiary Survives You or You Do Not Name a Beneficiary If no designated beneficiary survives you or you fail to designate a beneficiary, payment of insurance will be made to your surviving Spouse or Partner. If no Spouse or Partner survives you, equal payment will be made to your surviving child or children born to or legally adopted by you. If neither Spouse or Partner nor children survive you, equal payment will be made to your surviving parent or parents. If none of the above is applicable, State Farm Life may make payment to the duly qualified executor or administrator of your estate. Beneficiary Is a Minor or Incapable of Giving Release For Payment Any amount payable to a beneficiary who is a minor or is otherwise incapable of giving a valid release for any payment due may be paid to the legally appointed guardian of that beneficiary. If there is no guardian, the amount payable may be paid to the person or institution that has, in the opinion of State Farm Life, assumed the custody and principal support of the beneficiary. Assigning Your Life Insurance You may transfer your entire interest in your group life insurance policy by making an absolute assignment. With an absolute assignment, you transfer all of your rights under the plan, including the right to name a beneficiary. This assignment includes your certificate of insurance and all renewals (including, but not limited to, the right to have an individual policy issued in accordance with the policy s conversion privilege). You cannot make an assignment for the purpose of providing collateral. State Farm Life assumes no responsibility for the validity or effect of any absolute assignment or your interest in the policy and certificate. No such absolute assignment will be recognized until a copy of the absolute assignment has been duly filed with State Farm Life. Naming a Beneficiary for Dependent Life Insurance If living, you are the beneficiary of your Dependent s life insurance coverage. Otherwise, a Dependent's death benefit will be paid to your life insurance beneficiary, if living. If the beneficiary of your life insurance is not living, the Dependent's beneficiary will be the Dependent's estate. If you have made an absolute assignment of your life insurance, your Dependent's beneficiary will be the assignee EE SPD 12

13 GROUP LIFE INSURANCE BENEFITS Terms Used in the Benefit Schedules Compensation Compensation means the Employee's compensation in effect on the last day of the preceding month. For purposes of determining coverage, Compensation does not include commissions, bonuses, overtime pay, or other forms of compensation. Company Service This is your accumulated service time as an employee of the State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates. Partner The person to whom the Employee has legally entered into a relationship under the laws of the State in which the relationship is registered whether referred to as a civil union, domestic Partnership or substantially similar legal relationship. In the event of a discrepancy between the definition of Partner under the laws of another State and the definition of Partner under the Illinois Religious Freedom Protection and Civil Union Act (the Illinois Civil Union Law ), the Illinois Civil Union Law will control. An Employee may only have one Spouse or Partner enrolled at one time. Retirement For the purposes of life insurance, retirement is the termination of work if, at the time of such termination, you: Are at least age 55, Hired or rehired prior to January 1, 2012, Have at least five years of Company Service, and Elect immediate income under the Retirement Plan. Note: Employees hired or rehired on or after January 1, 2007 and prior to January 1, 2012 must have 15 years of Company Service and must elect immediate income under the Retirement Plan. Retirement Date Your Retirement Date is the first day of the calendar month next following the date of your actual retirement, as defined above EE SPD 13

14 Retirement Plan The State Farm Insurance Companies Retirement Plan for United States Employees. Spouse The person to whom the Employee is legally married under the laws of the State in which the Employee resides. Schedule of Insurance - Full-time and Part-time Employees The amount of insurance for an insured Full-time or Part-time Employee will be as follows: Group Life Employee s compensation multiplied by 2, and rounded up to the next multiple of $2,000. The minimum benefit is $10,000. Accidental Death and Dismemberment (AD&D) or Loss of Sight 100% of the amount of Group Life Insurance with a maximum of $100,000. The minimum benefit is $10,000. Total The AD&D or Loss of Sight benefit plus the Group Life benefit. Schedule of Insurance Retired Employees The Group Accidental Death and Dismemberment (AD&D) or Loss of Sight benefit and Dependent Group Life coverage (if enrolled) terminate on the date preceding the Retirement Date. The Companies will provide access to coverage as follows for an Employee who retires on or after January 1, 2012: HIRE/REHIRE COMPANY DATE SERVICE Prior to 1/1/07 Less than 5 years At least 5 but less than 10 years 10 or more years AGE AS OF 1/1/2012 BENEFIT ALL All Group Life coverage terminates at retirement 50 or over 25% of the amount of coverage in effect on the first of the month prior to retirement, with a minimum of $5,000 Coverage is paid 100% by the Company Under 50 25% of the amount of coverage in effect on the first of the month prior to retirement, with a minimum of $5,000 Coverage is paid 100% by the Retiree at age-banded rates 50 or over 50% of the amount of coverage in effect on the first of the month prior to retirement, with a minimum of $5,000 Coverage is paid 100% by the Company 2012 EE SPD 14

15 On or after 1/1/07 but prior to 1/1/12 Less than 15 years 15 or more years Under 50 ALL ALL 50% of the amount of coverage in effect on the first of the month prior to retirement, with a minimum of $5,000 Coverage is paid 100% by the Retiree at age-banded rates All Group Life coverage terminates at retirement 50% of the amount of coverage in effect on the first of the month prior to retirement, with a minimum of $5,000 Coverage is paid 100% by the Retiree at age-banded rates On or after 1/1/12 ALL ALL All Group Life coverage terminates at retirement If You Retire With Insurance of More Than $50,000 If your amount of group life insurance on and after your Retirement Date is more than $50,000 and you are not insured by the Extension of Death Benefit Provision Provided by the Group Life Insurance Plan, you may request to have your amount of life insurance reduced to $50,000. Your request must be in writing and in a form acceptable to State Farm Life. You may be able to convert the amount of group life insurance terminated. Retention of Life Insurance Upon Retirement Optional Retiree Group Life Insurance An Employee who: 1) retires with an effective date between January 1, 2002 and January 1, 2003 and 2) has 5 years or more of Company Service may retain his or her total group life insurance benefit by electing to pay 100% of the premium for the coverage amount in excess of the amount of insurance provided by the Company. An Employee, at the time of retirement, was given an irrevocable option to elect or waive this coverage. The 2012 monthly premium rate is $.29 per $1,000 of coverage. An Employee who was hired prior to January 1, 2007: 1) retires on or after January 1, 2003 and 2) has 5 years or more of Company Service will be given the irrevocable option of purchasing the amount of life insurance they would otherwise lose at retirement (Optional Group Life Insurance) or converting to a whole life, universal, or estate protector policy with a State Farm Agent. However, pricing for the Optional Group Life Insurance will be based on age-banded rates, which may be subject to change annually. The current age banded rates are: Age Monthly Premium Per $1, $ EE SPD 15

16 60-64 $ $ $ $ $ $ $ $ $ Rates will increase for the retiree on the January 1 following a birthday that moves them into a different age bracket. The Group Life policy can be amended, changed, or terminated at any time by written agreement between the Policyholder and State Farm Life. Retirees can be notified by letter in advance of any future changes to the plan or rate. If a retiree elects to cancel the Optional Group Life Insurance at a future date, conversion to a State Farm individual policy will be available. Schedule of Insurance for Employees Dependents Spouse or Partner The amount of group life insurance for your dependent Spouse or Partner is 50% of your Compensation rounded to the next $1,000, but not less than $10,000 and not more than $45,000. Dependent Children The amount of group life insurance for each of your covered dependent children from live birth to age 26 is $10,000 per child EE SPD 16

17 GROUP LIFE AND AD&D PREMIUMS Premium Rates The formulas below are used to calculate the amount of your monthly premium. State Farm Life may change these premium rates on: Any policy anniversary Any premium due date, if the current premium rates have been in effect for at least 12 months The date of any change in terms of the policy Note: Depending upon underwriting results from year to year, the premium charged may result in income to State Farm Life. Monthly Premiums for Life Insurance Covered Person Monthly Premium Employee $0.09 per $1,000 of life insurance Dependent children of Employee from live birth to age $0.10 per $1,000 of insurance per month, 26 regardless of the number of children insured ($1.00 per month) Spouse or Partner of Employee $0.18 per $1,000 of insurance per month Employee AD&D Insurance The premiums for AD&D and loss of sight benefits are paid by State Farm. Retired Employee hired prior to January 1, 2007 State Farm pays the monthly premium for the amount of group life insurance you are eligible for on and after your Retirement Date as determined by the Schedule of Benefits for Retirees. Retired Employee hired or rehired on or after January 1, You must pay 100% of the premium for the 2007 and prior to January 1, 2012 amount of group life insurance you are eligible for on and after your Retirement Date as determined by the Schedule of Benefits for Retirees EE SPD 17

18 Payment of Monthly Premiums for Employee Life Insurance You and State Farm share the cost of your life coverage. For active employees, your share of the premium will be paid with pre-tax Flex Dollars. Payment of Monthly Premiums for Dependent Life Insurance Employees pay the entire premium for Dependent coverage with after-tax contributions. LIFE INSURANCE BENEFIT CHANGES Change in Insurance Amount Prior to Retirement Any change in the amount of insurance for which you are insured will become effective on the first of the month following a change in your compensation. At Retirement Prior to March 10, 1980: If you retired on or before the first of the month following attainment of age 65 a change in insurance will occur on your Retirement Date and on the anniversaries of such date as specified in the Schedule of Benefits Retirees. If you retired after the first of the month following attainment of age 65 a change in insurance will occur on the first of the month following your birthday and on the anniversaries of such date as specified in the Schedule of Benefits Retirees. After March 10, 1980: A change in insurance will occur on your Retirement Date and on the anniversaries of such date as specified in the Schedule of Benefits Retirees. After Retirement If you request to reduce the amount of your life insurance to $50,000, the reduction will become effective on the first of the month following the date your request is received. When You Are Not Actively at Work If you are an Employee and your insurance is continued during disability, approved leave of absence, military leave for other than full-time active military duty, or temporary layoff, the amount of your insurance will be the amount for which you were insured on your last day of active work, except as follows: If the schedule of benefits provides a reduction in the amount of insurance on a specified date, age, policy anniversary or at any other specified time, the amount of your insurance will be reduced as provided by such schedule EE SPD 18

19 If the schedule of benefits provides an increase in the amount of insurance on a specific date, the amount of your insurance will be increased as provided by such schedule, unless you ve been totally disabled continuously for six months. If You Are Totally Disabled If you are continuously and Totally Disabled for at least six months, your insurance amount will not be increased if the schedule of benefits provides for one EE SPD 19

20 EXTENSION OF DEATH BENEFIT PROVISION FOR EMPLOYEES HIRED PRIOR TO JANUARY 1, 2007 Benefits State Farm Life will pay a death benefit under this section if either of the following two conditions is met: 1. Prior to the Employee s 65th birthday while insured under this Policy, the Employee becomes totally disabled and remains continuously disabled until death, or 2. The Employee dies within one year after premium payments stop for the Employee s group life insurance if written proof is received within one year after date of death stating total disability continued without interruption until the date of death. If the first condition above is met, State Farm Life will extend the group life insurance on such Employee without payment of premiums, during the continuance of such total and permanent disability, for a period of one year from the date of receipt of such proof, and for further successive periods of one year each during the continuance of total and permanent disability, the amount of group life insurance determined in accordance with this section. The amount of group life insurance, which will be extended under this section, will be based on the Schedule of Insurance in effect at the time of termination of employment of such Employee. No benefit is provided if a claim is otherwise established under the Conversion of Group Life Insurance or Minnesota Continuation of Coverage sections of this Policy because of the Employee s death. No benefit is provided if the total disability results from intended self-injury. Termination Extended coverage will continue until the earlier of: 1. The first of the month next following the date the Employee is no longer totally and permanently disabled, or 2. The first of the month on or next following the date the Employee attains age 65. If extended coverage is terminated because the Employee is no longer totally and permanently disabled, the Employee s group life insurance will terminate unless the Employee is at least age 55, has 5 or more years of Company Service, and elects to receive immediate income under the Retirement Plan, in which event the amount of group life coverage will be based on the Schedule of Insurance Retired Employees (and Schedule of Insurance Optional Group Life Insurance for Retired Employees when applicable) in effect on the Employee s last day of employment with the Companies. If extended coverage is terminated because the Employee attains age 65, the Employee s group life insurance will terminate unless the Employee had 5 or more years of Company Service and the Employee s age plus 2012 EE SPD 20

21 years of Company Service was greater than or equal to 55 on the Employee s last day of employment with the Companies, in which event the amount of group life coverage will be based on the Schedule of Insurance Retired Employees (and Schedule of Insurance Optional Group Life Insurance for Retired Employees, if applicable) in effect on the Employee s last day of employment with the Companies. The Employee will then be entitled to the rights and benefits under the Conversion of Group Life Insurance section unless the Employee returns to active employment with the Employer during such period and is again eligible for insurance under this Policy. Total Disability Total disability is a condition caused by injury or disease. During the first 24 months after total disability starts, this condition must prevent the Employee from performing substantially all of the work of the Employee s regular occupation. After the first 24 months, the condition must prevent the Employee from performing substantially all of the work in any occupation for which the Employee is, or becomes, reasonably qualified based upon education, training, or experience. The condition must commence after the date the Employee becomes insured under this Policy and must not result from an intended self-injury. Total and Permanent Disability Total and permanent disability is total disability as defined above that has existed continuously for at least 6 months. Total and permanent disability will be recognized to exist and no further proof of disability will be required if State Farm Life is furnished with due proof that an Employee has suffered the entire and irrecoverable loss, caused by injury or disease, of the sight of both eyes, or the loss by severance of both hands at or above the wrists, or both feet at or above the ankle joints, or one hand at or above the wrist and one foot at or above the ankle joint. Proof of Total Disability and Death State Farm Life must be furnished with due proof of total disability, continuing total disability, and death. Such proof must be submitted within 12 months from the date of Employee s termination. If an Employee dies within one year after the date of termination of the Employee s group life insurance under this Policy but before written proof of total disability has been received by State Farm Life, then written proof that total disability continued without interruption until the date of death must be furnished to State Farm Life within one year after death occurs. If an Employee dies at any time after initial proof of total disability has been received by State Farm Life, further written proof that total disability without interruption until the date of death must be furnished to State Farm Life. State Farm Life may also require that proof of the Employee s continuing total disability be submitted at reasonable intervals. Proof will not be required more than once a year after the total disability has lasted more than 2 years. Examination State Farm Life has the right to designate a physician to examine the Employee when and as often as it may 2012 EE SPD 21

22 reasonably require during any period that total disability is claimed to exist, but not more often than once each year after insurance has been extended under this section for two full years. Such examination will be at the expense of State Farm Life EE SPD 22

23 AD&D AND LOSS OF SIGHT BENEFITS If you are an eligible employee, the amount of group accidental death and dismemberment (AD&D) and loss of sight insurance is determined according to the schedule of group life insurance benefits. When AD&D Death Benefits are Payable The full amount of your AD&D insurance benefit is payable for loss of life, in addition to any other life insurance death benefit, if your death: Occurs while you are insured under the policy, Results directly, and independently of all other causes, from bodily injury incurred while you are insured under this policy, and Occurs within 180 days of the date of such injury. No more than the full amount of AD&D insurance will be paid for all losses resulting from any one accident. If you die before State Farm Life receives due proof of loss, payment will be made to your beneficiary, subject to the provisions of the policy. When AD&D Death Benefits are Not Payable No AD&D insurance benefit will be paid for any death that results from: Suicide while sane, or self-destruction while insane. The voluntary, not to include purely accidental or unintentional, taking of a drug or drug-containing substance, unless taken as prescribed by a physician. The voluntary, not to include purely accidental or unintentional, taking of a poison. The voluntary, not to include purely accidental or unintentional, inhaling of a gas, fume or vapor. Any disease of mind or body. Committing an assault or felony. Taking part in a riot. Flight in an aircraft for the purpose of descent from such aircraft. Descent from an aircraft while in flight. Operating or riding in an aircraft controlled or chartered by a military service. Any act due to war, whether or not the employee is in the military service. War means declared or undeclared war or conflict involving the armed forces of one or more countries, governments or international organizations EE SPD 23

24 Schedule of AD&D and Loss of Sight Benefits Upon receipt of due proof that an employee, while insured, has sustained any of the losses listed below and occurred within 180 days after such loss, total and permanent disability will be deemed to exist solely for the purposes of determining eligibility for AD&D and/or loss of sight benefits. State Farm Life will pay the applicable amount shown below. Loss Thumb and index finger of the same hand One hand One foot Sight of one eye Both hands or both feet Sight of both eyes One hand and one foot One hand and sight of one eye One foot and sight of one eye Amount of Benefit ¼ the amount of AD&D insurance ½ the amount of AD&D insurance ½ the amount of AD&D insurance ½ the amount of AD&D insurance Full amount of AD&D insurance Full amount of AD&D insurance Full amount of AD&D insurance Full amount of AD&D insurance Full amount of AD&D insurance With respect to hands or feet, "loss" means dismemberment by severance at or above the wrist or ankle joint. With respect to eyes, "loss" means the entire and irrecoverable loss of sight. With respect to thumb and index finger actual severance through or above metacarpo-phalangeal joints. Loss of Use Benefit If accidental injury results in any one of the following specific losses to the Employee within 180 days from the date of accident, the Company will pay the benefit specified as applicable thereto, based upon the AD&D amount; provided, however, that no more than one (the largest) of such benefits shall be paid for any person with respect to losses resulting from one accident. Loss of Use of: 1. Four limbs Full amount of AD&D Insurance 2. Three limbs Three-Quarters (3/4) amount of AD&D Insurance 3. Two limbs Two-Thirds (2/3) amount of AD&D Insurance 4. One limb One-Half (1/2) amount of AD&D Insurance Loss of Use shall mean total paralysis of a limb (a jointed appendage, as an arm or leg) which is determined by State Farm Life to be permanent, complete and irreversible. If more than one Loss arises out of the same accident, the Company will pay only one benefit. This will be the largest one EE SPD 24

25 Seat Belt Benefit State Farm Life will pay an additional accidental Loss of Life benefit of 10% as determined by the AD&D amount which will be payable to the designated beneficiary. This benefit is payable for loss of life as the result of an accident which occurs while the Employee is driving or is an occupant in an automobile if: 1. the automobile is equipped with seat belts; 2. the seat belt was in actual use and properly fastened at the time of the accident; 3. the position of the seat belt is certified in the official report of the accident or by the investigating officer. A copy of the accident report must be submitted with the claim; and 4. the Employee insured person was driving or riding in an automobile driven by a licensed driver who was neither: a. intoxicated or driving while impaired. Intoxication and impairment shall be determined by the law of the jurisdiction in which the accident occurs, with or without conviction; nor b. under the influence of an narcotic, hallucinogen, barbiturate, amphetamine, gas or fumes, poison or any other controlled substance as defined in Title II of the Comprehensive Drug Abuse prevention and Control Act of 1970, as now or thereafter amended, unless as prescribed by a licensed physician and used in the manner prescribed. Conviction is not necessary for determination of being under the influence. Seat belt means those belts that form an occupant restraint system. Automobile for the purpose of this benefit, means a self-propelled private passenger motor vehicle with four or more wheels which is a type both designed and required to be licensed for use on the highways of any state or country. Automobile includes, but is not limited to a sedan, station wagon, jeep-type vehicle, or a motor vehicle of the pickup, panel, van, camper or motor home type. Automobile does not include a mobile home or any motor vehicle which is used in mass or public transit. When Dismemberment or Loss of Sight Benefits are Not Payable No dismemberment or loss of sight benefits will be payable for any loss which results from: Attempted self-destruction or intentionally self-inflicted injury while sane or insane. Any act due to war, whether such war is declared or undeclared. The commission of any assault or felony. Physical Examination State Farm Life will have the right to designate a physician to examine the employee whose injury or loss is the 2012 EE SPD 25

26 basis of a claim when and so often as it may reasonably require. It will also have the right to request an autopsy in the case of death, where it is not prohibited by law. Termination of AD&D and Loss of Sight Coverage AD&D and loss of sight coverage ends when your group life insurance coverage terminates. The AD&D and loss of sight coverage cannot be converted under the conversion of group life insurance provision nor does the extension of death benefit provision apply to AD&D and loss of sight coverage EE SPD 26

27 WHEN COVERAGE ENDS When Life Insurance Coverage Ends for Employees Your life insurance coverage will automatically terminate on the earliest of the following dates: The date the Employees Group Life Insurance Plan terminates. The last day of the month in which you cease to be a member of an eligible employee class, unless you re eligible for benefits after disablement or retirement.* The date of the expiration of the last period for which you ve made a required premium contribution. The last day of the month in which your Reemployment Rights expire. * Your termination of employment will be deemed to have occurred upon cessation of active work within the eligible classes, except if you re on an approved leave of absence, temporarily laid off or unable to work because of disability. In these cases, you will be considered as still employed within the eligible classes until the policyholder, acting in accordance with rules precluding individual selection, terminates your insurance by notifying State Farm Life to that effect or by discontinuing payments for your insurance. When AD&D Insurance Coverage Ends for Employees Your AD&D insurance automatically terminates when your life insurance terminates. AD&D benefits also automatically terminate when your life insurance is continued under the extension of death benefit provision provided by the Employees Group Life Insurance Plan, or on the day before your Retirement Date, whichever is earlier. When Life Insurance Coverage Ends for Dependents Life insurance for a Dependent automatically terminates on the earliest of the following dates: The date the Dependent Group Life Insurance provision terminates. The date the Employee s life insurance terminates. The date of the expiration of the last period for which you ve made a required premium contribution. For a Spouse or Partner, the last day of the month in which he/she ceases to be eligible for life insurance, the last day of the month during which you divorce, or the last day of the month in which the 2012 EE SPD 27

28 Spouse or Partner starts full-time active military duty or completes 45 days or more of military service other than full-time active military duty. For a child, on the last day of the year the child reaches age 25 or becomes eligible as a State Farm employee or agent, or the last day of the month in which the child marries, starts full-time active military duty, completes 45 days of military service other than full-time active military duty or otherwise ceases to be eligible for insurance.* The day preceding your Retirement Date. * A child placed in your home for the purposes of legal adoption will cease to be eligible for life insurance if the placement is disrupted prior to legal adoption and the child is removed from your home. If Insurance is Continued Under the Extension of Death Benefit Provision If your insurance is being continued under the extension of death benefit provision provided by the Employees Group Life Insurance Plan, benefits will be continued for your Dependents. Converting Your Life Insurance Coverage Your Group Life Insurance Terminates Because of Your Loss of Eligibility If your Employees Group Life Insurance coverage terminates because of termination of actively-at-work status, membership within the eligible classes or as a result of disability, and is not replaced by any other group life insurance coverage provided by State Farm, you may convert to an individual life insurance policy without disability or AD&D benefits. The following conditions apply to the individual policy: It must be on any one of the forms of individual life insurance policy, except term insurance, customarily issued by State Farm Life at the time.* The amount of the individual policy cannot exceed the amount of group life insurance you had before termination of your coverage. * New York residents may have such a policy preceded by up to one year of preliminary term insurance. Termination of the Group Life Insurance Plan Policy If the Employees Group Life Insurance Policy terminates (or is amended so as to terminate your insurance), and you ve been continuously insured by State Farm Life under a group life insurance policy for at least five years* immediately preceding the policy s termination or amendment, you may convert your group life insurance to an amount that does not exceed the smaller of: The amount of your terminated group life insurance, less any amount of life insurance for which you 2012 EE SPD 28

29 $10, * may be eligible under any other policy that replaces it within 31 days after termination of your insurance, or * Residents of Minnesota and New York are not subject to the five-year limit or $10,000 maximum. Termination of Your Group Life Insurance Because of Your Transfer If your Employees Group Life Insurance coverage is terminated because of your transfer to another eligible State Farm position, you may convert only the amount of terminating life insurance that exceeds the amount of group life insurance for which you re eligible in your new position. When You Must Apply for Conversion Coverage You have 31 days to apply for conversion coverage and pay the required premium following termination of your coverage under the Employees Group Life Insurance Plan. No evidence of insurability is required. The premium for the individual policy will be at State Farm Life s then customary rate applicable to the form and amount of the individual life insurance policy, the class of risk to which the employee then belongs, and the employee s attained age and gender. The policy date of your conversion policy will be the day after the end of the 31-day period. If you die during this 31-day period, the amount of group life insurance that you re entitled to convert will be paid to your beneficiary, even if you have not applied for conversion. Conversion and the Extension of Death Benefit Provision Conversion to an individual insurance policy will not preclude the establishment of rights under the extension of death benefit provision, provided all the conditions of that provision are fulfilled within the required time, and the individual policy is surrendered without claim to State Farm Life for cancellation (except for a refund of premiums). Converting Your Dependent Life Insurance Coverage Your dependents have the same rights of conversion if their insurance terminates. You must apply for conversion within 31 days after their coverage under the plan terminates EE SPD 29