Life Insurance For Teachers: What's The Deal In New Jersey?

Teachers in New Jersey are offered life insurance as part of their benefits package. The state's teachers and educational support professionals contribute a percentage of their salary to a pension plan, which provides a guaranteed income in retirement. This is further supplemented by health benefits, which are considered critical to protecting the health of employees and their families, as well as students. Life insurance is also included in this package, with coverage typically representing 3 to 3.5 times the beneficiary's annual salary.

Teachers' Pension and Annuity Fund

The Teachers' Pension and Annuity Fund (TPAF) is a pension program for teachers in New Jersey. Contributions to the fund are federally tax-deferred, with the current contribution rate set at 7.06%. Teachers appointed to positions requiring certification by the New Jersey Department of Education and working 32 hours or more per week must enrol in the TPAF as a condition of their employment.

The TPAF also includes a Group Term Life Insurance Policy with a contributory rate of 0.004%. This insurance policy is provided by the employer through the retirement system at no cost to the member. When a teacher retires, goes on a leave of absence, or terminates their employment, their coverage ends after 31 days. However, they may be eligible to convert their coverage to an individual policy.

To enrol in the TPAF, teachers must complete their designation of Beneficiary form online with the Division of Pensions and Benefits. The TPAF Member Guidebook provides detailed information on eligibility and enrollment requirements. The guidebook also covers various topics such as intrafund and tier-to-tier transfers, purchasing service credit, and pension loans.

The TPAF is one of the seven pension funds offered to government employees in New Jersey. It is specifically designed for employees of boards of education and the state who are required to be certified or credentialed as a condition of their employment.

Group Life Insurance

Noncontributory Group Life Insurance is provided by the employer through the retirement system, and there is no cost to the member for coverage. Contributory Group Life Insurance, on the other hand, is coverage where the member pays a premium through payroll deductions.

The amount of coverage provided by Group Life Insurance varies. The Board of Education typically covers 1.5 times an individual's salary. However, contributing to the Teachers' Pension and Annuity Fund increases coverage to 3.5 times one's salary. Similarly, coverage under the Public Employee Retirement System is worth three times an individual's salary.

Financial advisors often recommend a coverage of five to seven times one's salary to adequately protect one's family. In addition to Group Life Insurance, the New Jersey State Health Benefits Program and School Employees' Health Benefits Program offer employees and their dependents access to direct primary care doctors at no additional cost.

Retirement benefits

In New Jersey, teachers and educational support professionals are provided with retirement benefits. These benefits are part of a defined benefit pension plan, where teachers contribute a percentage of their salary and receive credit for the time they serve public school students. This pension plan guarantees a retirement income, which is a form of deferred compensation that members earn as part of their compensation package.

The retirement benefits for teachers in New Jersey are managed by the Teachers' Pension and Annuity Fund (TPAF). The TPAF allows for the purchase of additional service credit, which can increase the pension amount or enable an earlier retirement. To be eligible for these benefits, teachers must meet specific requirements, such as maintaining active membership in the retirement system and making regular pension contributions.

The retirement benefits also include post-retirement medical coverage, which is an important aspect of an employee's deferred compensation. Lowering the cost of health insurance for school employees and school districts is a priority, as outlined in the 2020 Ch. 78 relief plan, signed into law by Governor Murphy. This plan aims to provide quality health benefits for public school employees, which not only benefits the employees and their families but also helps protect the health of students.

Additionally, life insurance coverage is provided as part of the retirement benefits package. This coverage can be through Noncontributory Group Life Insurance, provided by the employer at no cost to the member, or Contributory Group Life Insurance, where the member pays a premium through payroll deductions. The level of coverage provided varies, with the Board of Education typically covering 1.5 times a teacher's salary, while contributions to the Teachers Pension and Annuity Fund result in coverage of 3.5 times the salary.

Post-retirement medical benefits

In New Jersey, teachers and educational support professionals contribute a percentage of their salary towards a pension plan that provides a guaranteed income in retirement. Post-retirement medical benefits are an important element of an employee's deferred compensation.

On July 1, 2020, Governor Murphy signed the NJEA's Ch. 78 relief plan into law, which lowered the cost of health insurance for school employees and districts. This plan, P.L. 2020, Ch. 44, is part of the New Jersey State Health Benefits Program (SHBP) and the School Employees' Health Benefits Program (SEHBP). These programs offer employees and their covered dependents access to a Direct Primary Care doctor's office at no additional cost. This benefit is available through Horizon Blue Cross Blue Shield plans and does not require any changes to the employee's existing health insurance plan.

Employees can choose a Direct Primary Care doctor from Everside Health or Sanitas Medical Centers and gain unlimited access to personalized care with no copays. Direct Primary Care doctors provide a wide range of services, including preventative, urgent, and sick care, health and wellness coaching, chronic disease management, and care coordination.

Additionally, in New Jersey, district coverages typically represent 3 to 3.5 times an employee's annual salary. However, financial advisors often recommend a coverage of 5 to 7 times the annual salary to adequately protect the employee's family.

NEA Life Insurance

Eligible members can take advantage of the NEA Complimentary Life Insurance Program, which is fully paid for by the NEA Members Insurance Trust. This program offers $15,000 of term life insurance for the first 12 months of membership, at no cost. After this introductory period, members can continue to benefit from affordable group rates for various life insurance plans created specifically for educators.

The NEA Group Term Life Insurance Plan, for example, offers flexible coverage of up to $500,000. The NEA Level Premium Group Term Life Insurance Plan provides even higher coverage of up to $1 million, with rates that remain locked in for the entire term. This means that the younger a member is when they apply, the lower their rate will be, and it will stay the same throughout the duration of the plan.

Additionally, the NEA Guaranteed Issue Life Insurance Plan offers guaranteed coverage for members over the age of 45, helping their loved ones with funeral costs, medical bills, or legal help. This plan has no health questions and is ideal for those who may have pre-existing conditions.

NEA also offers accidental death and dismemberment insurance plans, providing coverage in the event of a major accident. These plans include the NEA Accidental Death & Dismemberment Insurance Plan, which offers affordable rates starting at $19 per year, with no medical exam required.

Overall, NEA Life Insurance provides a comprehensive range of protection options for its members, ensuring peace of mind and financial security for themselves and their families.

Frequently asked questions