Delta Air Lines: Understanding Their Optional Life Insurance

Delta Air Lines offers its employees a range of benefits, including company-paid basic life insurance, with the option to purchase additional coverage. This optional life insurance is available during open enrollment and provides a higher payout than the standard amount offered. Delta also provides exclusive Group Medicare Insurance Plans for retirees and their spouses, with eligibility starting at age 65.

Delta's optional life insurance vs. SGLI

Delta Air Lines offers its employees a range of benefits, including optional life insurance. The company provides industry-leading total compensation and covers basic life insurance. In addition, Delta offers multiple health plan options, dental and vision plans, and long-term disability coverage.

Servicemembers' Group Life Insurance (SGLI) is a form of low-cost term coverage for eligible service members. SGLI provides coverage of up to $500,000 in $50,000 increments. It also offers 120 days of free coverage after leaving the military and extends free coverage for up to two years if the individual is totally disabled upon leaving the military. SGLI is available to active-duty members of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard. Additionally, commissioned members of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS) and cadets or midshipmen of the U.S. military academies are eligible.

Delta's optional life insurance provides flexibility for employees to choose a plan that suits their specific needs. The company also offers other benefits such as an annual profit-sharing plan, monthly operational incentives, a 401(k) plan with company matching contributions, and various health and wellness programs.

In contrast, SGLI is specifically designed for service members and offers comprehensive coverage at a low cost. SGLI also provides additional benefits, such as free coverage extensions under certain circumstances and the ability to choose coverage levels or refuse coverage altogether.

Both Delta's optional life insurance and SGLI aim to provide financial protection for individuals and their loved ones. However, Delta's optional life insurance is part of a broader benefits package for employees, while SGLI is tailored to the unique needs of service members and offers benefits that specifically cater to their military service.

Basic and optional life insurance coverage

Delta Air Lines offers basic and optional life insurance coverage to its full-time employees and their dependents. This includes accidental death and injury insurance. The basic plan pays out a lump sum to beneficiaries of up to $50,000, while the maximum amount increases to $500,000 if employees take the optional coverage.

Life insurance policy provisions describe or explain various features, benefits, and conditions of the policy. These provisions stipulate the rights and obligations of both the insurer and the insured. Every life insurance policy contains numerous provisions that Delta employees and retirees should be informed about. For example, most states require certain provisions to be included in life insurance policies by law, such as the free look, grace period, incontestability clause, and reinstatement provision.

Additionally, provisions like the beneficiary designation are extremely important. When purchasing a life insurance policy, the policy owner must decide who will receive the death benefits when they pass away. This beneficiary must outlive the policy owner to receive the proceeds.

Delta employees can also take advantage of other benefits, such as emergency savings programs, financial coaching, retirement savings plans, and comprehensive medical insurance.

Delta's Military involvement and payouts

Delta Air Lines has a long history of supporting active military members, veterans, and their families, which includes various travel benefits, partnerships, and community support.

Military Benefits

Active-duty US military members are offered recognition and savings that are not available to civilian customers. This includes early boarding, free checked baggage allowance, and special policies on pet travel and vacation packages. Delta also provides discounted military medical emergency flights for those with a war-injured immediate family member or domestic partner. In addition, active-duty service members can check five bags, each weighing up to 100 pounds, for free when travelling on orders, and two free checked bags weighing up to 50 pounds when travelling for leisure. Military members can also check their pets as baggage for a fee when travelling on active transfer orders.

Partnerships

Delta has partnered with several organisations to support veterans, including Military MOJO, Service Academy Career Conference, Value of a Veteran, and MBA Veterans Network. The airline also helps veterans transition to civilian careers through partnerships with organisations such as FourBlock, military.com, and the PaYS Program. Delta is also a principal funder of four Fisher House Foundation facilities, where families of military personnel can stay free of charge while their loved ones receive treatment.

Community Support

Delta supports 10 USO chapters through sponsorship and volunteer work, including assembling care packages, serving hot meals, and spending time with service members. The airline also supports Folds of Honor in 16 markets across the US through funding for educational scholarships. Additionally, Delta stands by at hubs across the country with the Delta Honor Guard to ensure those who have died in service are honoured and cared for on their final journey. Delta has also supported the Marine Toys for Tots campaign for almost 20 years, providing bicycles and toys to children in need in December and contributing annually to the organisation.

Global Humanitarian Response

Delta has also contributed to global humanitarian relief efforts, such as providing $1 million to the American Red Cross and Global Red Cross Movement in support of humanitarian relief in Ukraine, with Delta customers helping to raise an additional $1 million. The airline also contributed $100,000 to the American Red Cross following the 2023 earthquake in Turkey and Syria.

Beneficiary designation

When considering Delta Air Lines' optional life insurance, it is important to spend time thinking about the beneficiary designation as it is one of the most important decisions regarding life insurance. When purchasing a life insurance policy, you must decide who will receive the death benefits of the policy when you pass away. The beneficiary clause permits you to name this beneficiary, who must outlive you to receive the proceeds.

The beneficiary of your life insurance policy can be any person or institution of your choosing. You can assign the policy to a specific beneficiary, such as a spouse, child, or another dependent. Alternatively, you can assign the policy to a bank or other institution as collateral for a loan. In the event of your death before the loan is repaid, the bank would receive a portion of the death benefits to cover the outstanding loan balance, with the remaining benefits going to your chosen beneficiary.

It is crucial to carefully consider your options when designating a beneficiary, as this decision has significant financial and legal implications. You may also want to consult additional resources or seek professional advice to ensure you make the best decision for your specific situation.

Additionally, keep in mind that Delta Air Lines offers both basic and optional life insurance coverage for full-time employees and their dependents, including accidental death and injury insurance. The basic plan pays out a lump sum of up to $50,000, while the optional coverage increases the maximum payout to $500,000.

Provisions in Delta's life insurance policy

Assignment Clause

The assignment clause allows the policy owner to transfer all or part of the rights in the life insurance policy to another person or institution. For example, if you take out a loan from your bank and use your life insurance policy as collateral, the assignment clause lets you assign the policy to the bank. In case of your death before repaying the loan, the bank receives the death benefits up to the outstanding loan balance, and the remaining amount is paid to your beneficiary.

Automatic Premium Loan Provision

This provision states that if the policyholder fails to pay the premiums, the insurance company may use the accumulated cash value to pay them to prevent the unintentional lapse of the policy. Interest is charged on the loaned amount, and any outstanding loan balance reduces the death benefit.

Hazardous Occupation or Hobby Exclusion

This provision states that no death benefit will be paid if the insured person dies due to a dangerous career or hobby, such as skydiving. While this clause may not be included in modern life insurance policies, those in certain high-risk categories might have to pay higher premiums.

Incontestability Clause

After the insurance policy has been in force for a certain period, usually two years, the insurance company cannot contest or void it, except for non-payment of premiums. If the company finds a reason to void the policy, it must take action before the end of this specified period.

Misstatement of Age/Sex Clause

This provision emphasizes the importance of accurately stating age and sex in the life insurance agreement. If the insured person understates their age or misrepresents their sex to obtain a lower premium, the insurance company can adjust future premiums and demand payment of additional premiums upon discovery. If the misstatement is found after the insured person's death, the company will compute the amount of insurance that the premiums would have purchased for someone of the same age and sex.

Ownership Provision

The ownership provision names the owner of the policy, which is crucial when the owner is someone other than the insured, such as a wife owning a policy on her husband's life.

Payment of Premiums Provision

This provision states that the insured person must pay the premiums as they come due to keep the policy in force. Non-payment may cause the policy to lapse, but the reinstatement provision allows for restoring the policy by paying back premiums and interest.

Policy Loan Provision

The policy loan provision stipulates the amount that can be borrowed against the cash value of the policy, the interest rate, and other terms for policy loans. If there are outstanding loans at the time of the insured person's death, the unpaid amount and accumulated interest will be deducted from the death benefit.

Reinstatement Provision

The reinstatement provision requires the insurance company to reinstate a lapsed policy if requested within a certain period, typically three years from the last premium payment. The company may require paying back premiums with interest and providing proof of insurability, such as a medical examination.

Renewability Provision

This clause allows term life insurance policyholders to renew the policy without a medical examination or proof of insurability, regardless of their physical condition. However, premiums will increase upon renewal to reflect the person's life expectancy at their current age.

Spendthrift Provision

The spendthrift provision protects the proceeds of the policy from the actions of an irresponsible beneficiary. It stipulates that the proceeds will not be paid in a lump sum and will be held by the insurance company, safe from any creditors of the beneficiary. It also prohibits the beneficiary from assigning the payments to a creditor or borrowing against the proceeds.

Suicide Clause

This clause states that if the insured person commits suicide within a specified time, usually two years, after purchasing the policy, no death benefits will be paid. However, any premiums paid will typically be refunded.

War or Military Service Exclusion

This provision stipulates that there will be no payment of insurance proceeds if the insured person's death results from a declared war or while serving in the military.

Frequently asked questions