CHOICES LIFE INSURANCE PLAN DETAILS 2013 PLAN YEAR

Transcription

1 CHOICES LIFE INSURANCE PLAN DETAILS 2013 PLAN YEAR UPDATED JULY 1, 2013

2 CONTENTS TABLE OF CONTENTS Introduction... 1 Overview... 2 Employee Life Insurance... 3 Basic Life Insurance... 3 Additional Life Insurance... 3 Total Life Insurance... 3 About Term Life Insurance... 3 About Universal Life Insurance... 4 Building Cash Value In Universal Life... 4 Beneficiary Information... 4 Assignments... 5 Accelerated Benefit In Case of Terminal Illness... 5 Will Preparation Benefit and Estate Resolution Services... 5 Will Preparation Benefit... 5 Estate Resolution Services... 6 Hyatt Legal Plans... 6 Changing Life Insurance... 7 Dependent Life Insurance... 8 Covering Your Spouse/Partner... 8 Covering Your Children... 9 Accelerated Benefit In Case of Terminal Illness... 9 Beneficiary Information... 9 Contributing To The Plan The Cost For Your And Your Spouse s/partner s Coverage If Your Pay Changes During The Year If Your Age Changes During The Year Cost Of Your Children s Coverage Imputed Income If You Become Disabled If You Terminate Employment If You Are Receiving Severance Pay Retirement While On Severance If You Retire Current Employees Transitional Employees Grandfathered Employees/Retirees Limitations If You Die How To Claim Benefits Initial Claims Determination Claims Procedures, Denials, Appeals Initial Claims Appealing Denied Claims Limitations On Legal Action When Coverage Ends I

3 INTRODUCTION/OVERVIEW INTRODUCTION This document provides detailed information about the Choices Life Insurance Plan. It is supplemented by the General/Administrative Information Plan Details, which includes information about general provisions such as: Eligibility, When Coverage Begins, Enrolling in the Plan, Changing Coverage and If You Are Married to an Employee of the Johnson & Johnson Family of Companies. The General/Administrative Information Plan Details also includes information about Plan administration and your rights under ERISA (Employee Retirement Income Security Act of 1974). Please note COBRA is not applicable to the Choices Life Insurance Plan. Taken together, this Life Insurance Plan Details, the General/Administrative Information Plan Details and any materials specifically incorporated by reference in this document are considered your total Summary Plan Description for the Choices Life Insurance Plan as required by ERISA. ACCESSING PLAN DETAILS/SUMMARY PLAN DESCRIPTIONS (SPDS) AND FORMS To access/print Plan Details/SPDs for descriptions of particular benefit Plans, or forms and certain other benefit materials, log on to Your Benefits Resources (YBR) at: (this address is case sensitive, so use lower-case letters). Alternatively, you can submit a request through YBR to have copies of Plan Details/SPDs sent to your mailing address on file. You may also call the Benefit Service Center at (if calling from outside the U.S. or Canada: ; TDD: please call your local relay service). You will receive the materials requested within 30 days. 1

4 INTRODUCTION/OVERVIEW OVERVIEW Planning for your family s financial security in the event of your or a family member s death is never a pleasant subject. However, it is an important one. That s why the Company provides you with the Choices Life Insurance Plan to help you plan for your family s financial security in the event of your death or the death of a covered dependent. The following Employee Life Insurance coverages are available through Choices: Term Life Insurance This life insurance covers you for a fixed period or term which is the length of your eligible employment at the Johnson & Johnson Family of Companies. The Company provides Basic Term Life Insurance of 1 times pay to Choices eligible full-time and part-time employees at no cost. See About Term Life Insurance on Page 3 for more information. Universal Life Insurance This life insurance covers you and accumulates cash value that can give you paid-up life insurance or cash at retirement or termination. At retirement or termination, you may keep your Universal Life Insurance (up to Plan maximums) by continuing to pay the premiums as determined by the Service Administrator, MetLife. See About Universal Life Insurance on Page 4 for more information. You may elect Additional Term or Universal Life Insurance coverage or a combination of both for yourself up to 9 times your pay. In addition, you can choose Term Life Insurance for your spouse/partner and/or children. Universal Life Insurance is not available for your dependents. Please note that benefits will be provided only to the extent covered under the insurance contract. 2

5 EMPLOYEE LIFE INSURANCE EMPLOYEE LIFE INSURANCE Employee life insurance benefits offer protection for your family in case of your death. The Company offers Term and Universal Life Insurance in multiples of your pay. Your pay will be rounded to the next higher $1,000 if not already a multiple of $1,000, and then multiplied by the option you elect. Please refer to the Your Pay section in the General/Administrative Information Plan Details for the definition of your pay (see the box on Page 1 for access instructions). BASIC LIFE INSURANCE You will receive Basic Term Life Insurance equal to 1 times your pay, subject to a maximum of $250,000, at no cost to you. ADDITIONAL LIFE INSURANCE Your specific needs may call for more life insurance. If so, you may enroll in an additional 1 to 9 times your pay in any combination of Term or Universal Life Insurance (up to a combined total life insurance of 10 times your pay including Basic Life insurance). TOTAL LIFE INSURANCE Your combined Total Life Insurance cannot be more than 10 times your pay, subject to a maximum of $250,000 per multiple of pay: 1 times pay Basic Term + [ ] times pay Additional Term + [ ] times pay Additional Universal 10 times pay combined Total Life Insurance (max of $2,500,000); ABOUT TERM LIFE INSURANCE Term Life Insurance provides death benefit coverage on your life during a fixed period or term which is the length of your eligible employment at the Johnson & Johnson Family of Companies. If you leave the Johnson & Johnson Family of Companies, your Term Life Insurance coverage ends. You may convert some or all of your Term Life Insurance to an individual policy when you terminate your employment or retire. For more information on converting your coverage, see the If You Terminate Employment section on Page 13. 3

6 EMPLOYEE LIFE INSURANCE ABOUT UNIVERSAL LIFE INSURANCE Universal Life Insurance is different from Term Life Insurance because you accumulate cash value and your coverage is portable. Portability means that when you leave the Johnson & Johnson Family of Companies for any reason, including retirement, you have the option to continue your Universal Life Insurance coverage. However, if you continue your coverage after you terminate or retire contributions may be higher than the amount you paid as an active employee. In the event of your death, your beneficiary for Universal Life Insurance would be entitled to the life insurance portion of the plan only (not the cash value). You can also withdraw or borrow against the cash value you have accumulated. However, your life insurance portion of the plan will be reduced for any amounts you have withdrawn or borrowed and not yet paid back. To make a cash value withdrawal or initiate a loan, call MetLife at BUILDING CASH VALUE IN UNIVERSAL LIFE A portion of your contribution for Universal Life coverage goes toward building the cash value. The cash value equals your total contributions minus the cost for Term Life Insurance coverage minus a 2% expense charge. Your cash value and any accumulated interest are tax-deferred until withdrawal. The interest rate for your cash value contribution is fixed by the insurance company each year and is guaranteed not to go below 4%. It is based on current money market conditions and the performance of the insurance company s investment portfolio. Interest is credited on the last day of each month and compounded daily. Each year, you will receive a statement summarizing your current cash value, as well as any loans or withdrawals. BENEFICIARY INFORMATION You name the person or persons to receive your Term or Universal Life Insurance benefits if you die. If there is no Beneficiary at your death for any amount of benefits payable because of your death, that amount will be paid upon your death to the first surviving person(s) in the following order: Your legal spouse*, in full; Your surviving children, in equal shares; Your surviving parents, in equal shares; Your surviving brothers and sisters, in equal shares; or Your estate, executor or administrator. 4

7 EMPLOYEE LIFE INSURANCE * Spouse includes your Civil Union partner, however, it does not include your domestic partner. To name a beneficiary you may: Designate the beneficiary online at Your Benefits Resources (see the box on Page 1 for access instructions) or Call the Benefit Service Center at and request a Beneficiary Designation form. ASSIGNMENTS You may assign your life insurance benefits. This means you transfer your right of ownership of the amount assigned to another person or to a trust. The assignee becomes the owner of the policy. You may only increase or decrease the level of the assigned insurance with the assignee s permission. A beneficiary designation can only be made by the assignee. Please call the Benefit Service Center and speak to a Benefit Service Representative for more information. ACCELERATED BENEFIT IN CASE OF TERMINAL ILLNESS If you become terminally ill, you may receive a one-time advance payment --called an accelerated benefit -- of up to 100% of your Basic and Additional Life (i.e. Term or Universal Life) Insurance benefit. The minimum accelerated benefit payment is $10,000. A doctor must provide proof, acceptable to MetLife that your illness is terminal and that death is expected within six months. Although this money is generally not taxable, you should consult a tax advisor before accessing this feature. Benefits paid to your beneficiary after your death are reduced by any accelerated benefit paid to you. For more information or to apply, please call the Benefit Service Center and speak to a Benefit Service Representative. Note the accelerated benefit does not apply if you assign your life insurance benefits as noted above. WILL PREPARATION BENEFIT AND ESTATE RESOLUTION SERVICES If you are enrolled for additional Life Insurance coverage (Term or Universal), you are eligible for a Will Preparation benefit along with Estate Resolution Services, offered at no cost to you through Hyatt Legal Plans, a MetLife company. WILL PREPARATION BENEFIT The Will Preparation Benefit covers the attorney fees associated with having a will prepared or updated when you use an attorney who participates in Hyatt s network and includes the following: 5

8 EMPLOYEE LIFE INSURANCE - Attorney consultations to discuss preparing or updating your and/or your spouse s or partner s will; - Preparing or updating the will; - Preparing a codicil(s); and - Creating testamentary trusts, living wills and powers of attorney. Living trusts and tax planning are not covered under this benefit. When you use a participating plan attorney, you don t incur any attorney fees or submit any claim forms. You may also use a non-participating attorney and receive reimbursement for covered services up to a set dollar limit ($150/$175 for individual/combined wills). To use a non-participating attorney, you must first contact Hyatt Legal Plans and request authorization and the fee reimbursement claim forms to take advantage of this feature. ESTATE RESOLUTION SERVICES Estate Resolution Services provides coverage for probate (legal) services to executors or administrators of a deceased employee s estate including: - Telephone and office consultations (Beneficiaries, that are not the executor or administrator, also receive consultations); - Preparation of documents; - Representation at Court proceedings; - Completion of correspondences to transfer assets; and - Associated tax filings. There is no additional cost for attorney fees for the services above if the beneficiary/executor uses a participating plan attorney. They may also use a nonparticipating attorney and receive reimbursement for covered services up to a set dollar limit ($50 for advice & consultation / $375 for a simple procedure / $1,500 for standard probate). To use a non-participating attorney, the beneficiary/executor must first contact Hyatt Legal Plans and request authorization and the fee reimbursement claim forms to take advantage of this feature. HYATT LEGAL PLANS 1 To take advantage of the Will Preparation Benefit and Estate Resolution Services, simply contact Hyatt Legal Plans at , Monday through Friday from 8:00 a.m. to 7:00 p.m. Eastern Time and identify yourself as a Johnson & Johnson participant (MetLife Group #39930) to the Client Service Representative. 1 Will Preparation and Estate Resolution services are offered by Hyatt Legal Plans, Inc., Cleveland, Ohio. In certain states, legal services benefits are provided through insurance coverage underwritten by Metropolitan Property and Casualty Insurance Company and Affiliates, Warwick, Rhode Island. 6

9 EMPLOYEE LIFE INSURANCE CHANGING LIFE INSURANCE You may elect to increase your current level of life insurance to any level at any time. Based on the circumstances, you may or may not be required to provide Proof of Good Health. You may also switch your coverage from Term to Universal Life and vice versa, except for the 1 times Basic Term Life, at any time during the year. Certain restrictions may apply while on Disability (see page 12) or Severance (see page 14). You may also decrease your coverage, but not below the Basic Term Life amount, at any time during the year. Please see the Changing Coverage section in the General/Administrative Information Plan Details (see the box on Page 1 for access instructions) for more information. Note: If you switch all of your Universal Life coverage to Term, MetLife will process a cash surrender of your accumulated cash value account, which may have tax implications. 7

10 DEPENDENT LIFE INSURANCE DEPENDENT LIFE INSURANCE Dependent Life Insurance coverage under the Choices Life Insurance Plan is Term Life Insurance only and therefore only available during the term of your employment with the Johnson & Johnson Family of Companies. Covering your dependents is optional. Please refer to the Your Eligible Dependents section of the General/Administrative Information Plan Details for information on dependent eligibility for Plan benefits (see the box on Page 1 for access instructions). COVERING YOUR SPOUSE/PARTNER You may choose one of the following Term Life Insurance options for your spouse/partner: $5,000 1/2 times your pay 1 times your pay 2 times your pay 3 times your pay Life insurance for your spouse/partner may not exceed $250,000. See the Your Pay section in the General/Administrative Information Plan Details (see the box on Page 1 for access instructions) for the definition of your pay. Your spouse/partner needs to be enrolled within 60 days of their initial eligibility period or qualified status change; otherwise Proof of Good Health will be required. See the General/ Administrative Information Plan Details (see the box on Page 1 for access instructions) for more information on Proof of Good Health requirements and process. If you elect an option based on your pay, your pay will be rounded to the next higher $1,000 if not already a multiple of $1,000, and then multiplied by the option you elect. Spouse/partner life insurance can be converted to an individual policy when you leave the Company for any reason, including retirement, or if you and your spouse divorce (or you and your partner end your relationship). For more information on converting coverage, see If You Terminate Employment on Page 13. 8

11 DEPENDENT LIFE INSURANCE COVERING YOUR CHILDREN You may choose one of the following Term Life Insurance options for your eligible children: $5,000 per child $10,000 per child $15,000 per child You may cover your eligible children under the Choices Dependent Life Insurance Plan from fourteen days of age through the end of the month in which they turn age 26. Please refer to the Your Eligible Dependents in the General/Administrative Information Plan Details for a definition of eligible dependents (see the box on Page 1 for access instructions). Your eligible children must all be covered under the same option. The cost of life insurance coverage for your eligible children is the same, regardless of the number of children you cover. Proof of Good Health is not required to enroll or increase coverage for your eligible children. Your children s life insurance cannot be converted to an individual policy if you leave the Company for any reason, including retirement, or if your child becomes ineligible for coverage. ACCELERATED BENEFIT IN CASE OF TERMINAL ILLNESS If your spouse/partner becomes terminally ill, you may receive a one-time advance payment -- called an accelerated benefit -- of up to 100% of your Dependent Life Insurance benefit. The minimum accelerated benefit payment is $10,000. A doctor must provide proof, acceptable to MetLife that your spouse/partner s illness is terminal and that death is expected within six months. Although this money is generally not taxable, you should consult a tax advisor before accessing this feature. Benefits paid after your spouse/partner s death are reduced by any accelerated benefit paid. For more information or to apply, please call the Benefit Service Center and speak to a Benefit Service Representative. BENEFICIARY INFORMATION You are the beneficiary for your dependents life insurance coverage under the Choices Dependent Life Insurance Plan. 9

12 CONTRIBUTING TO THE PLAN CONTRIBUTING TO THE PLAN THE COST FOR YOUR AND YOUR SPOUSE S/PARTNER S COVERAGE The Company pays for your Basic Term Life Insurance benefit of 1 times pay. You may also enroll your spouse/partner for Term Life Insurance coverage. You pay the entire cost of your spouse s/partner s coverage. You may elect Additional Term or Universal Life Insurance coverage for yourself, in any combination, up to 9 times pay with a maximum of $250,000 per multiple of pay for a Total Life Insurance benefit, including the Company provided Basic Term Life Insurance, of up to 10 times pay. You pay the entire cost for any Additional Term or Universal Life Insurance coverage you elect. The cost of coverage for you and your spouse/partner is based on your respective ages, as well as your pay. As a new hire, the cost is based on your age as of January 1 st of the year in which you are hired and your pay as of your date of hire. At Annual Enrollment, the cost is based on your current pay and your age as of January 1 of the following year. Your contributions for life insurance coverage are on an after-tax basis. The contributions for Additional Universal Life Insurance coverage are more than twice that for Additional Term Life Insurance coverage (up to age 70). A portion of your Universal Life Insurance contribution goes toward building the cash value. AGE EMPLOYEE TERM LIFE INSURANCE EMPLOYEE UNIVERSAL LIFE INSURANCE SPOUSE/PARTNER TERM LIFE INSURANCE Less than to to to to to to to to to to to to to 94 $ MONTHLY RATE PER $1,000 OF COVERAGE $ $ To calculate your annual contribution, multiply the total by 12 and round to the nearest $1. 10

13 CONTRIBUTING TO THE PLAN IF YOUR PAY CHANGES DURING THE YEAR If your pay increases during the year, your and your spouse s/partner s life insurance coverage and contribution amounts will increase automatically (except for the $5,000 spouse/partner option). Employee life insurance coverage will always be based on your highest level of pay (except for employment status changes as noted below), however dependent life insurance will be based on your current pay. If your pay decreases during the year no automatic adjustment in your coverage or contribution amount will be made (except for employment status changes as noted below). However, your spouse s/partner s life insurance coverage and contribution amount will decrease automatically (except for the $5,000 option). If you move from full-time to part-time status or vice-versa, your life insurance coverage will be based on your new pay. If as a result of another employment status change, you lose and then gain life insurance eligibility within the same calendar year, then your life insurance coverage will be based on your highest level of pay. Otherwise, if you lose and then gain life insurance eligibility within in a different plan year, then your life insurance coverage will be based on your new level of pay. Any new contribution amount will be reflected in one to two paychecks. IF YOUR AGE CHANGES DURING THE YEAR Costs will increase as your and your spouse s/partner s ages increase in five-year age brackets (refer to chart on Page 10). Any new contribution amounts due to age change will take effect in your first paycheck of the next calendar year. COST OF YOUR CHILDREN S COVERAGE Your annual cost for dependent children coverage for life insurance is the same regardless of the number of children you cover. $3.38 for $5,000 benefit $5.89 for $10,000 benefit $8.86 for $15,000 benefit IMPUTED INCOME The Company pays the cost of 1 times pay Basic Term Life Insurance for all Choices eligible full-time and part-time employees. The Internal Revenue Code requires that the value of group life insurance in excess of $50,000 that is paid by the Company be considered as additional income when determining your gross income for federal tax purposes. This imputed income will be reported on your annual W-2 statement and will appear as income on your pay stub. There is no imputed income on additional term or universal life insurance, spouse/partner life insurance or child life insurance since they are fully employee-paid. 11

14 IF YOU BECOME DISABLED IF YOU BECOME DISABLED If you are collecting benefits under the Choices Short Term Disability (STD) Plan, your Basic Term Life and elected Additional Term or Universal Life Insurance, as well as any elected Dependent Term Life Insurance, continues. However, you must remain in the Plan(s) you were enrolled in at the onset of your disability. You cannot change your coverage between Term and Universal Life Insurance until you return to work at the Johnson & Johnson Family of Companies. Contributions will continue to be deducted from your paycheck during your STD period. After six months, if you are considered disabled by the Choices Long Term Disability (LTD) Plan, your Basic Term Life Insurance coverage and any Dependent Term Life Insurance coverage you have through the Company will automatically continue at the same level, but at no cost to you. Your Employee and Dependent Term Life Insurance coverage will continue, at no cost to you, until you recover, retire or die whichever comes first as long as you and your dependents were enrolled in these coverages before your disability began and continue to meet the eligibility requirements of the Choices Long Term Disability (LTD) Plan. If you have Universal Life Insurance coverage at the time you go on LTD, you may: Continue your Universal Life Insurance coverage, but stop making contributions to your cash value account. The face amount of your policy will remain intact and the growth in your cash value account will be limited to the interest earnings according to a rate specified by MetLife. Continue your Universal Life Insurance coverage and also contribute toward your cash value by sending contributions (minimum of $100 at any time) directly to MetLife in the form of a check. You will not have to pay for the life insurance portion of your Universal Life Insurance coverage as long as you continue to be eligible to receive benefits under the Choices LTD Plan (or would be eligible to receive LTD benefits if you had enrolled for such coverage). However, you are expected to cooperate with all policies, procedures, evaluations, audits and investigations under all of the plans sponsored by the Company that provide you with coverage or benefits while you are disabled. If you fail to cooperate appropriately with respect to any of these plans, you may lose coverage under this plan (and all other Company-sponsored plans). 12

15 IF YOU TERMINATE EMPLOYMENT IF YOU TERMINATE EMPLOYMENT Your Choices Employee and Dependent Life Insurance coverage ends on the date you terminate your employment with the Johnson & Johnson Family of Companies for any reason, including retirement (if you are not eligible for Retiree Life Insurance). For information on Retiree Life Insurance, see the section If You Retire on Page 15. If you terminate employment or retire, you may convert all or part of your and/or your spouse s/partner s Term Life Insurance coverage to an individual personal policy within 31 days of your termination. You must contact MetLife at to request conversion of your term life coverage. Your contributions may be higher than the amount you paid as an active employee. If you or your covered spouse/partner should die during this 31-day period, benefits will be payable from the Plan. You may not convert your children s life insurance coverage to an individual policy. If you were enrolled for Universal Life Insurance coverage, you will have the option to: Use the cash value to purchase a paid-up life insurance policy which would provide death benefit coverage for the remainder of your lifetime with no further premium payments; Cancel your coverage and take any accumulated cash value as cash; or Continue coverage on a portable basis up to Plan maximums by continuing to pay the contributions to MetLife. If you continue your Universal Life Insurance coverage on a portable basis, your contribution will change the 1 st of the following month following your termination effective date. Please note: Until you make an election, the accumulated cash value will be used to pay the cost of your Universal Life insurance. Premium payments for individual or Universal Life ported policies must be submitted directly to MetLife. If you have any questions, please call the Benefit Service Center to speak with a Benefit Service Representative. For questions regarding your Universal Life coverage, contact MetLife at

16 IF YOU TERMINATE EMPLOYMENT IF YOU ARE RECEIVING SEVERANCE PAY If your employment ends and you are receiving severance pay, your Choices Employee and Dependent Life Insurance deductions will continue to be taken from your pay during your severance period. You pay the full cost of this insurance including the cost of one times Basic Term Life Insurance and any Term and/or Universal Life Insurance until the end of your severance period. Once your severance period commences, you will not be allowed to switch your coverage between Term and Universal Life Insurance. At the end of your severance period, you may convert your Term Life Insurance to an individual policy and/or continue Universal Life Insurance coverage as previously outlined. RETIREMENT WHILE ON SEVERANCE If you are eligible for Retiree Life Insurance, you may continue the amount of Additional Life Insurance that was in effect at the time of termination, but you must pay the full cost for this insurance. The total amount of Life Insurance may not exceed 10 times your pay. You may also choose to either stop or decrease the Additional Life Insurance amount. If you are not eligible for Retiree Life Insurance, you may maintain the coverage amount that you were enrolled in prior to termination. You pay the full cost of this insurance, including the cost of the first 1 times pay Basic amount of insurance and any additional amounts that you maintain until the end of the severance period. At the end of the severance period, you may convert your Term Life Insurance to an individual policy and/or continue Universal Life Insurance coverage as previously outlined. 14

17 IF YOU RETIRE IF YOU RETIRE The Company offers retiree life insurance coverage to eligible retirees. Depending on your age at retirement and date of retirement, the following coverage is available: RETIREMENT DATE AGE / SERVICE REQUIREMENTS BENEFITS After January 1, 2001 (Current Employees) After January 1, 2001 (Transitional Employees) Before, On or After January 1, 2001 (Grandfathered Employees/Retirees) Age 55 or older / 10 or more years of Pension Credited Service Age 55 or older / 10 or more years of Pension Credited Service at retirement and Age 50 or older and actively employed on January 1, 2001 As of January 1, 2001: Age 55 or older / 10 or more years of Pension Credited Service or Age 55 or older / 5 or more years of Pension Credited Service and at least age 45 and actively employed on January 1, 1992 $10,000 term life coverage (Company paid) $10,000 term life coverage (Company paid) and opportunity to purchase additional coverage (Optional Retiree Life) of 1 times pay up to $100,000 maximum or 40% of 1 times pay up to $40,000 maximum 1 times pay to $100,000 maximum (Company paid). Coverage reduced 15% annually for first four years of retirement until 40% of final pay. Opportunity to buy the amount by which coverage is reduced (Optional Retiree Life) CURRENT EMPLOYEES If you retire as a Choices eligible full-time employee at age 55 or older with 10 or more years of Pension Credited Service, you are eligible for a Company-paid Retiree Term Life Insurance benefit of $10,000. If you retire as a part-time employee, you are eligible for Retiree Life Insurance as long as you satisfy the age and Pension Credited Service requirements noted above. TRANSITIONAL EMPLOYEES If you meet the Retiree Life eligibility requirements and were age 50 or older and actively employed as of January 1, 2001, you have a one-time opportunity at retirement to purchase the difference between the Company-paid Retiree Life Insurance coverage of $10,000 and either 100% or 40% of your final 1 times pay (maximum of $100,000 or $40,000, respectively). 15

18 IF YOU RETIRE The cost of this Optional Retiree Life coverage (Proof of Good Health not required) will be based on the group insurance rate based on your age as of January 1 st of your year of retirement, with age and rates adjusted annually thereafter. GRANDFATHERED EMPLOYEES/RETIREES If you were actively employed (or on an approved leave of absence) and age 55 or older with 10 or more years of Pension Credited Service as of January 1, 2001, you are eligible for a Retiree Term Life Insurance benefit of 1 times final pay, to a maximum of $100,000. You may also be eligible if you were actively employed with 5 or more years of Pension Credited Service and at least age 45 as of January 1, After one year, coverage is reduced by 15% annually for the first four years of retirement to an ultimate benefit of 40% of final pay. After each reduction, the life insurance benefit is rounded to the next higher $1,000, if not already a multiple of $1,000. The Company pays the full cost of this benefit. You will be given the opportunity to purchase the annual 15% per year reduction coverage at group rates. The cost of this Optional Retiree Life coverage (Proof of Good Health not required) will be based on the group insurance rate based on the retiree s age as of January 1 st of their first anniversary date and adjusted annually thereafter. Here is an example of the coverage reduction. If your pay at retirement is $50,000, then your Retiree Life Insurance would be: YEAR OF RETIREMENT 1st year 2nd year 3rd year 4th year 5th year Remainder of life BENEFIT $50,000 $43,000 $35,000 $28,000 $20,000 $20,000 LIMITATIONS For all eligible retirees, the total Term Life Insurance (Company Paid and Optional Retiree Life) coverage after retirement cannot exceed the amount of life insurance coverage you had as an active employee. This includes any Company-paid Retiree Life, any converted Term Life, any Universal Life continued as an individual policy and any spouse/partner life insurance if you are married to another employee or retiree of the Johnson & Johnson Family of Companies. In addition, total Retiree Life insurance (Company Paid and Optional Retiree Life) cannot exceed $100,000. The Accelerated Benefit In Case of Terminal Illness (as detailed on page 5) applies to Company-paid Retiree Life Insurance coverage as long as the Company-paid coverage is greater than or equal to $10,000. In addition, the Will Preparation and Estate Resolution Services (as detailed on Pages 5 and 6) applies if you have Optional Retiree Life Insurance. 16

19 IF YOU DIE IF YOU DIE In addition to any life insurance payments your beneficiary receives upon your death, your eligible dependents may also be entitled to continue certain other coverages as follows. If you had enrolled your family for Dependent Life Insurance, that protection will continue for up to six months after the date of your death. Dependent children s coverage will continue during this period as long as they meet the definition of an eligible dependent as defined in the General/Administrative Information Plan Details (see the box on Page 1 for access instructions). The Company pays the entire cost of this continued coverage for Dependent Life Insurance. HOW TO CLAIM BENEFITS In the event of your or a covered dependent s death, beneficiaries should call the Benefit Service Center at You or your survivors will be provided with claim forms, as well as information about required documentation (such as proof of death). The completed forms should then be mailed to MetLife for processing. INITIAL CLAIMS DETERMINATION By law, your claim must be evaluated and processed within 90 days from the date it was received. If more time is needed, you will receive a written notice within the 90-day period. The delay in payment cannot exceed 180 days from the date you first filed the claim. If your claim is denied, you will receive an explanation stating: The reason(s) for the denial; The Plan provisions involved; Any additional information needed; The reason for the information needed; An explanation of the appeal process; and A statement of your right to sue if the appeal is denied. 17

20 CLAIMS PROCEDURES, DENIALS, APPEALS CLAIMS PROCEDURES, DENIALS, APPEALS Initial Claims MetLife will be responsible for processing claims for benefits and making benefit determinations under the Choices Life Insurance Plan. MetLife will act in accordance with its own claim procedures and applicable law. GENERAL RULES Benefit determinations will be made on a consistent basis, where circumstances are the same. Determinations will be made in accordance with the terms of the Choices Life Insurance Plan, policies and contracts applicable to that Plan, and any applicable internal practices and guidelines that are maintained by MetLife. The Choices Life Insurance Plan will not charge for or otherwise unduly inhibit or hamper the filing or processing of a claim. MetLife will not preclude your authorized representative from acting on your behalf in pursuing a claim, although it may establish reasonable verification procedures for the representative. TIMING OF NOTIFICATIONS MetLife will determine whether to pay a claim or notify you of its determination to deny a claim in whole or in part, within a reasonable period of time. This period will not be longer than 60 days after the date it receives your claim unless special circumstances warrant an extension, MetLife will notify you of any extension within the initial 60-day period. The extension will not last longer than 45 days after the initial period ends. If all or part of your claim is denied, you will receive a claim denial notice. All determinations will be final and binding to the extent they are not appealed in accordance with the following procedures. MODE OF SETTLEMENT Insurance payable on account of your death is normally paid to the Beneficiary in one sum. Subject to applicable law, where the amount of the benefit meets MetLife s current minimum requirement, payment in one sum will be made by establishing a Total Control Account in the Beneficiary s name, unless the Beneficiary elects another settlement or payment option available at the time of claim, and the benefit distribution will be deemed complete when the account is established. The Total Control Account, a retained asset account, is an interest-bearing draft account backed by MetLife. Funds are held in MetLife s general account at a credited interest set by MetLife. The Beneficiary is provided a draftbook and has immediate access to the entire amount by writing drafts for any amount up to the account balance. 18

21 CLAIMS PROCEDURES, DENIALS, APPEALS Appealing Denied Claims SUBMITTING THE APPEAL If you disagree with a claim decision, you can apply for a claim review. You must send your request for review within 60 days after receiving the notice denying your initial claim. You should state the reason(s) you believe your claim was improperly denied and submit all comments, documents, records, and other information relating to the claim that you believe to be appropriate. In deciding whether to appeal a denial, you may, on request and free of charge, obtain access to and copies of all documents, records or other information relevant to your claim from MetLife. To file an appeal, you must notify MetLife in writing. GENERAL RULES Claim appeal determinations will be made on a consistent basis where circumstances are the same. Determinations will be made in accordance with the terms of the Choices Life Insurance Plan, policies and contracts applicable to that Plan, and any applicable internal practices and guidelines that are maintained by MetLife. The Choices Life Insurance Plan will not charge for or otherwise unduly inhibit or hamper the filing or processing of an appeal. MetLife will not preclude your authorized representative from acting on your behalf, although it may establish reasonable verification procedures for the representative. MetLife will take all of the comments, documents, records, and other information that you submit into account in reviewing your appeal and making its determination. TIMING AND NOTIFICATIONS MetLife will determine either to pay or to deny an appeal, in whole or in part, within a reasonable period of time that does not exceed 60 business days after its receipt of your appeal. If MetLife determines to deny all or part of your appeal, it will send you written notification of the denial. All determinations by MetLife on appeal will be final and binding. LIMITATIONS ON LEGAL ACTION You must pursue all claims and appeals rights available under the Plan, as set forth in this Life Insurance Plan Details, before seeking any other legal recourse. Any legal action under the Plan with respect to a denied claim must be initiated within three years of the date that the final appeal is denied or within the applicable statute of limitations, if shorter. 19

22 WHEN COVERAGE ENDS WHEN COVERAGE ENDS Coverage under the Choices Life Insurance Plan will end: If you stop making the required contributions to the extent contributions are required; On the date you terminate your employment with the Johnson & Johnson Family of Companies for any reason; If you belong to a specific class of employees that is no longer included in the coverages described under this Plan; or When this Plan ends. If you terminate your Universal Life Insurance coverage while an active employee as defined by the Plan, you must take the policy s cash value. MetLife will process a cash surrender of your accumulated cash value account. You will not be permitted to purchase paid-up insurance as an active employee. In certain circumstances (as outlined in prior sections), this coverage may be continued or converted to an individual policy. In all situations, coverage is limited to the extent that the applicable life insurance policy is limited. If you present false or misleading information about yourself, your spouse/partner, your child(ren) or your spouse s/partner s child(ren) with respect to any aspect of the Plan including, but not limited to, eligibility, dependent verification and/or claims, the Company will take appropriate action, up to and including the forfeiture of benefits, loss of coverage or termination of employment. Coverage may be terminated retroactively if you commit a fraudulent act or omission, make an intentional misrepresentation of a material fact or fail to make your contribution for coverage when it is due. 20