An Example of Calculating the Cost of Excess Life Insurance

ABC Foods uses the group life W-2 table on Group Life W-2 Table (BN00.4).

Neil, an employee at ABC Foods, is 41 years of age, and has $90,000 of coverage under an employee life plan. He pays for all his insurance on a pretax basis under a flex plan.

Neil has a spouse (Sarah) and two dependents (Karen and Bob) who are covered under ABC Food's dependent life plan. Sarah, who is 42 years of age, is covered under a spouse life plan for $10,000, while Karen and Bob, who are 13 and 16 years of age, are covered under a dependent plan for $5,000 each.

ABC Foods ran Life Insurance Reportable Income (BN150) to calculate monthly cost of excess life insurance. That is, when they ran BN150, they selected Monthly in the Frequency field.