by remberger » Mon Jan 27, 2020 3:01 pm
Hi everyone,
Strange as it may seem, Avaya did not terminate its group life insurance when it terminated our supplemental pensions. In one of my four (unsuccessful) court appearances, the issue of supplemental insurance came up, and Avaya's lawyers said it was not being terminated. I am doing this from memory, but the group life plan pays one times your annual salary if you die before age 65, The amount decreases to 1/2 your annual salary at age 70 and remains constant thereafter, IRS tax rules make the annual premium value for any group life insurance in excess of $50,000 in face value taxable.
I seem to recall seeing somewhere that Avaya had prepaid the insurance premium on the life insurance, so there was no benefit to cancelling it. That said, the point that Judge Bernstein made during that hearing was that the life insurance, as any other benefit, could be canceled at any time outside of bankruptcy.
I hope that helps clarify your issue.
Bob Emberger