University of Virginia Library

FACULTY INSURANCE PROPOSAL

The President presented the following proposal from the Committee on Contractual Relations
which was approved by the Board as submitted:

"The Committee on Contractual Relations proposes that a plan be adopted to cover the
lives of all full-time teaching personnel and administrative and research personnel Grade 8 and
above who are age 65 and under. The insurance coverage after age 65 does not seem worthwhile,
and a substantial death benefit will have been built up in the annuity contract. While participation
in the insurance plan is optional for present staff members who are eligible, once the
plan is established, all those who subsequently become members of the eligible class must take
the insurance, and it is felt that most of those over 65 will not prefer to pay for the relatively
small coverage afforded by the group insurance.

It is proposed that the amount of coverage be as follows

       

Age	Number of "Units of Insurance
35 and under	2
36 through 50	2½
51 through 65	3

For selected ages, this would provide the following insurance coverage

                 

Age	Guaranteed Insurance	Additional Insurance at the 1951 Dividend Rate (Not Guaranteed)	Total Coverage if 1951 Dividend Paid
25	$ 6,740	3,370	$ 10,110
35	4,400	2,200	6,600
36	5,225	2,612	7,837
45	3,025	1,512	4,537
50	2,150	1,075	3,225
51	2,400	1,200	3,600
60	1,260	630	1,890
65	840	420	1,260

An estimate of the annual cost of the proposed plan is shown below

         

Age	Number Eligible	Coverage	Total Annual Cost for 100% Participation
35 and under	104	2 units	$ 2,496
36 through 50	147	2½ units	4,410
51 through 65	105	3 units	3,780
Total	356		$11,086

One-half of the cost is borne by the insured staff-member, who would pay 50 cents per
month per "unit" of coverage.

The cost to the University would depend upon the age distribution of those who elect to
come into the plan. The University's share of the annual cost would be.

   

For 100% participation	$5,543
For 75% participation	4,157

The University's share may be reduced by prepayment of premium to.

   

For 100% participation	$4,631
For 75% participation	3,473

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To conform to requirements of the Teachers' Insurance and Annuity Association, a formal
resolution will be submitted to the Board at a later date.