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Understanding Life Insurance Policy Provisions: A Guide for Campbell Soup Employees and Retirees

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What Are Life Insurance Policy Provisions?

As Campbell Soup employees we understand that you are busy and likely have not spent countless hours researching life insurance policies. Life insurance policy provisions describe or explain various features, benefits, and conditions of your life insurance policy. Provisions in your life insurance policy also stipulate the rights and obligations of both the insurer (insurance company) and the insured (you). Every life insurance policy contains numerous provisions that it's important for Campbell Soup employees and retirees to be informed about. 

Most states have laws requiring certain provisions to be included in life insurance policies and prohibiting the inclusion of other provisions. Examples of provisions commonly required by law are the free look, the grace period, the incontestability clause, and the reinstatement provision. Certain provisions (such as the designation of beneficiary and entire contract clause) are found in every life insurance policy, regardless of the type of policy or the state in which it is issued. Life insurance policies also typically include an assortment of optional provisions that either you or the insurance company may choose to include in the contract. We recommend Campbell Soup employees and retirees consult additional resources to determine the best combination of policy provisions, options, and riders for your specific situation.

 

Common Policy Provisions

Assignment Clause

An assignment shifts all or part of the rights in a life insurance policy from the policy owner to another person or institution. The assignment clause in a life insurance policy usually allows you to freely assign the policy.

Example(s):  Suppose you take out a loan at your bank and the bank wants you to use your life insurance policy as collateral. The assignment clause would allow you to assign the policy to the bank. If you die before you pay off the loan, the bank would receive enough of your life insurance policy death proceeds to cover your outstanding loan balance. The remaining death benefits would be paid to your beneficiary.

Automatic Premium Loan Provision

This clause provides that if the policyholder fails to pay the premiums on a life insurance policy, the insurance company may automatically use the accumulated cash value to pay the premiums. The primary purpose of this provision is to prevent the unintentional lapse of your policy. Money loaned to the policyholder through an automatic premium loan is treated like any other loan against the policy's cash value. This means that interest will be charged on the loan, and any outstanding loan balance will reduce the death benefit.

Aviation Exclusion

This provision restricts payment of benefits if your death results from aviation activities unless you were a paying passenger of a regularly scheduled commercial flight. If, for example, you were killed as a pilot or passenger in a private plane crash, this exclusion would apply, and your beneficiary would not receive the death proceeds of the life insurance policy. At one time, this exclusion was part of almost every life insurance policy. Today, most policies cover such losses, although additional premiums may be required to cover private pilots.

Bailout Provision

Some life insurance policies impose surrender charges if the policy is terminated before a specified period of time has passed to recover expenses incurred during the issuance of the policy. A bailout provision reduces and in many cases eliminates these surrender charges. This provision enables you to withdraw your money or terminate your policy without penalty. However, you can typically invoke your rights under the bailout provision only if the insurance company fails to meet a certain standard--for example, if its interest rate falls below market standards.

Beneficiary Designation

Any Campbell Soup employee or retiree looking to start a life insurance policy, should spend a lot of time considering the beneficiary designation as it is arguably one of the most important decisions in regard to life insurance. When you purchase 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. Your beneficiary must outlive you in order to receive the proceeds

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Hazardous Occupation or Hobby Exclusion

This provision states that no death benefit will be paid if you die as a result of your dangerous career or hobby (e.g., skydiving). Although this clause is not automatically included in most modern life insurance policies, you may have to pay a higher premium if you fall into certain high-risk categories.

Incontestable Clause

Once your life insurance policy has been in force for a certain period of time (typically two years), the insurance company cannot contest or void the policy except for nonpayment of premiums. If the insurance company discovers some reason to contest or void the policy, it must take action before the end of the contestable period. Once the end of the specified period is reached, the policy generally cannot be voided.

Misstatement of Age/Sex Clause

We want to remind all Campbell Soup employees and retirees how important it is to accurately state your age and sex on your life insurance agreement. Age and sex are both factors in determining the cost of any given life insurance policy. If you understated your age or lied about your sex to obtain a lower premium, the insurance company has certain rights upon discovering such a misstatement. If you are alive when the misstatement is discovered, the insurance company can adjust the amount of your future premiums and demand payment of the additional premiums you should have paid before the misstatement was discovered. If the misstatement is not discovered until after you die, the insurance company must compute the amount of insurance your premiums would have purchased for someone of your actual age or sex and pay your beneficiary that amount.

Ownership Provision

The ownership provision in a life insurance policy specifically names the owner of the policy. This is particularly important when the owner of the life insurance policy is someone other than the insured (e.g., when a wife is the owner of an insurance policy on her husband's life).

Payment of Premiums Provision

This provision states that you must pay your premiums as they come due in order to keep your policy in force. If you do not pay your premiums for your life insurance policy, this non-payment may cause your policy to lapse. If your policy lapses, the reinstatement provision may allow you to restore your policy by paying back premiums and interest.

Policy Loan Provision

Policy loans have proven to be a powerful tool for many of our Campbell Soup clients. The policy loan provision stipulates the amount you can borrow against your cash value, the rate of interest, and other terms for policy loans. In the event that you die with policy loans outstanding, your insurance company will deduct the unpaid amount plus any accumulated interest from your death benefit. Policy loan provisions are found in most cash-value policies. If you own a term life insurance policy, there is no cash value to borrow. Thus, the policy loan provision does not apply.

Reinstatement Provision

A reinstatement provision requires the insurance company to reinstate a lapsed policy if you request it within a certain period. The reinstatement period is typically three years from the date of your last premium payment. Before your policy is reinstated, the insurance company can require you to pay all back premiums with interest and provide proof of insurability. This means you will probably have to take a medical examination to prove you are in good health. Even though it may be expensive, this can be an attractive option because, based on your age, you might have to pay much higher premiums for a new policy.

Renewability Provision

This clause in a term life insurance policy allows you to renew the policy without having to take a medical examination or provide proof of insurability, regardless of your physical condition at the time of renewal. However, your premiums will increase upon renewal to reflect your life expectancy at your current age.

Spendthrift Provision

A spendthrift provision is designed to protect the proceeds of the policy against the actions of an irresponsible beneficiary. The spendthrift provision provides that proceeds will not be paid in a lump sum and that money that is not immediately paid to the beneficiary will be held by the insurance company, where it will be safe from any creditors of the beneficiary. The spendthrift provision also prohibits the beneficiary from assigning the payments to a creditor or borrowing against the proceeds.

Suicide Clause

This clause stipulates that if you commit suicide within a specified time after purchasing the policy, no death benefits will be paid. The time period is typically two years from the date you purchase the policy. If you were to commit suicide during this period, no death benefits would be paid, but any premiums you had paid would typically be refunded.

War or Military Service Exclusion

This provision typically stipulates that there will be no payment of insurance policy proceeds if your death is the result of a declared war. The exclusion may also be written to restrict payment of proceeds for any death that occurs while the insured is serving in the military.

 

 

 

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What are the eligibility requirements for participating in the retirement plan at the Campbell Soup Company, and how does this affect employees who are newly hired or rehired after December 31, 2010? Understanding these eligibility criteria is crucial for current and prospective employees of the Campbell Soup Company, as it dictates participation in the retirement benefits that can provide financial security upon retirement.

Eligibility for Participation: Employees hired or rehired after December 31, 2010, are not eligible for the Campbell Soup Company's Retirement and Pension Plan. However, regular full-time or part-time employees scheduled to work at least 20 hours per week become immediately eligible for participation. Temporary or part-time employees scheduled to work less than 20 hours per week become eligible after working 1,000 hours in their first 12 months, or in subsequent 12-month periods​(Campbell_Soup_Company_R…).

Can you explain the differences between the Cash Balance Benefit and the Grandfathered Benefit under the Campbell Soup Company's retirement plan? This distinction is important for employees to understand how their length of service and date of hire could significantly influence their retirement earnings and options, potentially impacting their financial planning for retirement.

Cash Balance Benefit vs. Grandfathered Benefit: The Cash Balance Benefit provides credits based on a percentage of pay, while the Grandfathered Benefit applies to those hired before May 1, 1999. The Grandfathered Benefit is based on the Final Average Pay and years of service. Employees eligible for the Grandfathered Benefit receive the greater of the Cash Balance or Grandfathered Benefit, potentially resulting in higher retirement earnings based on their tenure​(Campbell_Soup_Company_R…).

How does the vesting schedule work for the Campbell Soup Company’s retirement plan, and what implications does it have for employees who leave the company before becoming fully vested? Employees of the Campbell Soup Company should consider the vesting requirements to ensure they optimize their benefits and understand how employment duration aligns with retirement planning strategies.

Vesting Schedule: Employees become fully vested after completing three years of service or reaching age 65 while employed. If an employee leaves before becoming vested, they forfeit their benefit. This schedule emphasizes the importance of remaining with the company for a sufficient duration to secure retirement benefits​(Campbell_Soup_Company_R…).

What options are available for employees of the Campbell Soup Company when they decide to retire, particularly regarding the form of benefit payment? Understanding these options is essential for planning a comfortable retirement, as employees need to make informed choices that align with their financial goals and personal circumstances.

Benefit Payment Options: Campbell Soup Company offers several forms of benefit payments, including a lump sum, life annuity, and joint survivor annuity. Employees can choose the payment form that best suits their retirement goals. Options like the lump sum allow for flexibility, while annuities provide steady income during retirement​(Campbell_Soup_Company_R…).

How does the Campbell Soup Company’s retirement plan handle employees who return to work after a break in service, especially concerning their vesting and benefit accrual? Employees of the Campbell Soup Company need to be aware of these policies to gauge how a break in employment could potentially impact their retirement plans and financial well-being.

Reemployment After Break in Service: If an employee returns after a break in service of less than five years, their prior vesting service and benefits are restored after completing another year of service. However, if the break exceeds five years, prior service is not restored unless the employee was already vested before the break​(Campbell_Soup_Company_R…).

What are the implications for spouses of employees in the Campbell Soup Company retirement plan regarding survivor benefits and the necessity for spousal consent under certain circumstances? Knowledge of these provisions is critical for employees as they plan for both their retirement and the potential financial security of their spouses.

Spousal Consent and Survivor Benefits: Spouses are automatically designated beneficiaries unless a waiver is signed. Survivor benefits include either the cash balance account or an actuarial equivalent of the accrued benefit. Spousal consent is necessary if employees choose another beneficiary or a different form of payment, ensuring spousal financial security​(Campbell_Soup_Company_R…).

In what ways does the Campbell Soup Company ensure compliance with IRS regulations regarding retirement benefits, and how might changes in these regulations impact employees? Employees should be aware of the relationship between their retirement plans at the Campbell Soup Company and IRS compliance, as ongoing regulatory changes can affect their retirement planning.

IRS Compliance: The plan adheres to IRS regulations, which impose limits on compensation and benefits. Compliance is essential to maintain the tax-advantaged status of the retirement plan. Changes in IRS rules may affect contributions, benefit limits, and tax treatment of distributions​(Campbell_Soup_Company_R…).

How is the Cash Balance Benefit calculated for employees of the Campbell Soup Company, and what factors influence the growth of this benefit over time? Employees need to understand this calculation to better plan their financial futures and make informed decisions regarding their contributions and potential retirement income.

Cash Balance Benefit Calculation: The Cash Balance Benefit grows annually through pay-based credits and interest. The percentage of eligible pay credited to the account increases with the employee’s age. This structure encourages long-term employment by increasing retirement savings over time​(Campbell_Soup_Company_R…).

What steps should employees of the Campbell Soup Company take to apply for retirement benefits, and what is the timeline for notifying the company about their retirement intentions? Knowing the correct procedures and timelines is vital for employees to ensure a smooth transition into retirement and the timely receipt of benefits.

Retirement Application Process: Employees must notify the Campbell Benefits Center approximately 90 days before retirement to initiate their benefits. This timeline ensures that benefits begin promptly, and employees can make informed decisions about their retirement options​(Campbell_Soup_Company_R…).

How can employees of the Campbell Soup Company reach the Campbell Benefits Center to inquire further about their retirement plans or address specific questions related to their benefits? It is essential for employees to have clear contact information, allowing them to seek assistance and enhance their understanding of the retirement options available to them.

Campbell Benefits Center Contact: Employees can reach the Campbell Benefits Center for inquiries related to their retirement plans via the website www.myCampbellBenefits.com or by calling 877-725-2255, ensuring easy access to information and support​(Campbell_Soup_Company_R…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
In 2024, Campbell Soup has initiated changes to its 401(k) plans as part of a broader restructuring effort. These changes include modifying the company's matching contributions and introducing new investment options for employees. The company's aim is to align its retirement benefits with current economic conditions and to enhance financial stability for its workforce. The adjustments have been communicated internally, and employees are encouraged to review the new plan details and adjust their retirement strategies accordingly​
Restructuring Layoffs: In May 2024, Campbell Soup announced significant restructuring efforts that will lead to the layoffs of approximately 415 employees. The company plans to close its Tualatin, Oregon plant, impacting 330 workers, and reduce staff at its Jeffersonville, Indiana site, affecting 85 employees. The Oregon plant closure will happen in phases, with the first phase affecting 120 employees by August 2024. This restructuring aims to optimize Campbell's manufacturing and distribution network for greater efficiency and agility​ (InvestorPlace)​ (ROI-NJ). Benefit Changes: Campbell Soup's fiscal 2023 report highlighted adjustments in its employee benefits. The company projected a $45 million decrease in pre-tax pension and post-retirement benefit income compared to the previous year. These changes reflect the company's efforts to manage costs amidst an evolving economic environment. The reduction in benefit income underscores the importance of staying informed about corporate benefit adjustments, especially given the current economic, investment, and tax climate​
Stock Options Campbell Soup offers stock options to employees, granting them the right to purchase company shares at a predetermined price, known as the exercise price, after a specific vesting period. These options are typically provided to senior management and executives as part of their performance-based compensation. The stock options vest over several years and can be exercised within a set period, usually up to ten years. Restricted Stock Units (RSUs) RSUs at Campbell Soup are awarded under the Long-Term Incentive Plan (LTIP). These units represent a commitment to issue company shares to employees upon meeting specific performance criteria or after a certain period. RSUs are used to incentivize long-term performance and align employees' interests with those of shareholders. The units vest over time, and employees receive the shares upon vesting. RSUs are available to a broader group of employees compared to stock options, often including middle management and key contributors across various departments.
Campbell Soup Company provides comprehensive health benefits designed to support the well-being of their employees. For both full-time and part-time employees (working at least 20 hours per week), health coverage begins immediately. This includes medical, dental, and vision plans. Additionally, Campbell's offers a Health Savings Account (HSA) with up to $1,000 in annual funding​ (Campbell Soup Company)​ (Campbell Soup Company). Campbell Soup’s health benefits package includes various healthcare-related terms and acronyms such as Health Savings Account (HSA), 401(k) plans, and Employee Assistance Programs (EAP). The company emphasizes preventive care and wellness initiatives, providing access to mental health services, disability insurance, and domestic partner benefits. They also offer financial wellness tools and programs to help employees manage their health expenses more effectively​ (Campbell Soup Company). Recent news highlights Campbell's commitment to improving employee health benefits. For instance, they have maintained immediate eligibility for their health plans and continue to offer comprehensive coverage options that cater to different needs, including family coverage and wellness programs aimed at promoting a healthy lifestyle among employees​
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For more information you can reach the plan administrator for Campbell Soup at 1 Campbell Place Camden, NJ 8103; or by calling them at +1 856-342-4800.

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