Estate planning at Aetna

When you leave employment, you have two options to continue coverage. The Portability option allows you to port 50%, 75%, or 100% of your group life coverage (up to $250,000) at group term rates. The Conversion option allows you to convert your group term life to an individual whole life policy without a medical examination. Both options require application and first premium payment within 31 days of coverage termination. Ported coverage reduces by 75% at age 65 and terminates at age 75. Contact your employer HR department or Aetna at 1-800-872-3862 for conversion and portability details.

Basic life insurance is employer-paid and typically provides coverage equal to 1x to 2x your annual salary (or a flat dollar amount). Supplemental (voluntary) life insurance is employee-paid and allows you to purchase additional coverage beyond the basic amount for yourself, your spouse, and your dependent children. Both are group term life policies. The employer determines the specific plan design, coverage amounts, and guaranteed issue limits. Both basic and supplemental life coverage allow you to name a trust as beneficiary.

Portability allows you to continue group term life coverage at group rates after leaving employment. You can port 50%, 75%, or 100% of coverage up to $250,000, but ported coverage reduces by 75% at age 65 and terminates at age 75. Conversion allows you to convert group term life to an individual whole life policy without a medical examination. The converted policy has level premiums and builds cash value, and it does not terminate at a set age. Both options require application and first premium payment within 31 days of coverage termination. A converted individual policy can be assigned to an ILIT for estate tax planning, while a ported group policy cannot.

To name a trust as beneficiary on an Aetna group life insurance policy, you need the full legal trust name exactly as it appears in the trust document, the date the trust was established, the trustee name, and the trust EIN (Employer Identification Number). Select trust as the beneficiary type on the Designation of Beneficiary form and set the percentage allocation. A Certificate of Trust or trust abstract is sufficient; do not send the full trust document unless Aetna specifically requests it. Submit the form through your employer HR or benefits department.

If no named beneficiary survives the insured, Aetna pays the life insurance proceeds as prescribed in the Group Policy. The typical order of payment is: surviving spouse, then surviving children equally, then surviving parents equally, then the estate of the insured. Payment to the estate requires Letters of Administration or Letters Testamentary from probate court, which can delay receipt of benefits. To avoid this, keep beneficiary designations current and always name both primary and contingent beneficiaries with percentage allocations totaling 100%.