Understanding PG&E’s Life and AD&D Insurance Benefits

We find life and accident insurance often get overlooked when people think about both retirement planning and financial security. Most of the time, the focus is on pensions, retirement savings plans (401k, 403b, 457), or Social Security. While those are absolutely critical pieces, they don’t address one of the biggest risks families face: what happens if something happens to you before you retire?

PG&E provides employees with life insurance and accidental death and dismemberment (AD&D) insurance as part of the PG&E benefits package. These benefits are designed to give your family a financial cushion if you were to unfortunately pass away or suffer from a serious injury. This isn’t a topic people love to talk about, but it’s so important for you and your family. So, the company pays for a basic level of coverage, and you have options to buy more.

We’ll break it all down in plain English, with some real-world examples of how these benefits work, what choices you have, and how they fit into your bigger retirement plan.

The Basics: Company-Paid Coverage

Again, all eligible PG&E employees receive basic life insurance and basic AD&D coverage at no cost:

• Group Life Insurance: $10,000 in coverage, paid for by the company.
• Accidental Death & Dismemberment (AD&D): $10,000 for most employees, or $250,000 for officers, senior management, and certain attorneys.

This means that even if you never fill out a form or buy extra coverage, your family would still have at least $10,000 in life insurance and some protection in case of a fatal accident.

Now, that’s not a lot. It’s a start, but for most families, $10,000 doesn’t go very far. That’s why PG&E gives you the option to buy supplemental coverage.

Supplemental Life Insurance: Building on the Base

The supplemental coverage options are where you can tailor your PG&E benefits to your family’s needs.

• Management employees can purchase up to $4 million in coverage.
• Union employees can purchase up to $1 million in coverage.

You can choose a fixed amount (like $50,000) or a multiple of your salary, usually up to six times.

A Family with a Mortgage

Let’s say you earn $120,000 a year and have a $400,000 mortgage. If something happened to you, your family would need enough insurance to cover the mortgage, replace your income for at least a few years, and help with future expenses like college. A $600,000 or $750,000 policy could make sense in this case.

Without supplemental coverage, your family would only receive the $10,000 basic life insurance. That might cover a funeral, but it wouldn’t keep the household afloat.

Spouse and Child Coverage

PG&E also lets you add coverage for your spouse, domestic partner, and children.

• Spouse/Domestic Partner: Coverage options range from $10,000 to $100,000. You can cover up to 50% of the total amount you carry for yourself.
• Children: You can elect $5,000, $10,000, or $25,000 per child (up to age 26). Infants under 14 days old are covered for $1,000.

This is an easy way to make sure your whole family has some level of protection.

Voluntary AD&D Coverage

In addition to life insurance, you can buy extra accidental death and dismemberment insurance. This type of coverage pays out if you die in an accident or suffer a serious injury, like losing a limb, sight, or hearing.

• Management employees can elect up to $4 million in voluntary AD&D coverage.
• Union employees can elect up to $1 million.

You can also cover your spouse and children. For example, if you elect $1 million of voluntary AD&D coverage, your spouse would be covered for 40% ($400,000) and each child for 10% ($100,000).

This isn’t a substitute for life insurance, but you can use it as a way to layer on additional protection, especially if you spend a lot of time traveling or working in riskier environments.

Features That Add Value

These plans come with some add on features that can really help your family:

• Will Preparation Services: If you buy supplemental life insurance, you and your spouse or partner can have wills drafted or updated at no cost through MetLife’s Hyatt Legal Plans.
• Estate Resolution Services: Your beneficiaries get free help from an attorney to navigate probate after you pass away.
• Accelerated Benefit Option: If you’re diagnosed with a terminal illness, you can access up to 80% of your life insurance early to help cover expenses.
• Travel Assistance and Identity Theft Solutions: If you have AD&D coverage, you get access to worldwide emergency services and ID theft recovery help.
• Hospital Confinement Benefit: Extra monthly payments if you or a covered family member are hospitalized due to an accident.

These benefits often get overlooked, but they can save your family time, money, and stress.

Real-World Planning Considerations

Here’s where most employees miss the mark: life and AD&D coverage don’t exist in a vacuum. They’re part of your bigger financial and retirement picture.

• Your Pension and 401(k): These are designed to provide retirement income if you live a long life. Insurance is about protecting your family if you don’t. Think of them as complementary pieces.
• Your Retiree Medical Savings Account (RMSA): The RMSA helps with healthcare costs in retirement, but if you pass away before using it, the benefit for your family may be limited. Life insurance fills that gap.
• Social Security: Survivor benefits can help, but they rarely replace a full income. Insurance is what keeps the lights on and the mortgage paid.

When you look at your whole picture, the question isn’t just “How much coverage do I get from PG&E?” It’s “Would my family be okay if my paycheck stopped tomorrow?”

Common Mistakes Employees Make

Even with good benefits, mistakes are common. Here are a few I see regularly when working with PG&E families:

1. Relying Only on the Basic Coverage
2. Many employees assume the company-paid $10,000 or $250,000 is “good enough.” In reality, it often covers only final expenses.
3. Not Updating Beneficiaries
4. Life changes—marriage, divorce, kids—but people forget to update their beneficiary forms. That means the wrong person could receive the money.
5. Ignoring Imputed Income
6. If your life insurance exceeds $50,000, the IRS counts part of it as taxable income. That shows up on your W-2. Many people are surprised when their taxable income looks higher than their actual pay.
7. Over-Insuring or Under-Insuring
8. Buying the maximum isn’t always necessary, but carrying too little leaves your family exposed. The right number depends on your debts, savings, and goals.
9. Thinking AD&D is Enough
10. AD&D only pays if death or injury is caused by an accident. Illness—heart attack, cancer, stroke—isn’t covered. That’s why a mix of life and AD&D coverage matters.

Putting It All Together: An Example

Imagine two PG&E employees:

• Employee A relies only on the company-paid basic coverage. They pass away unexpectedly, and their family receives $10,000. That covers funeral costs, but the mortgage and college savings are left hanging.
• Employee B takes advantage of supplemental life insurance, choosing 3x salary ($360,000), plus $50,000 for a spouse and $10,000 per child. When they pass, the family has nearly $450,000 in coverage, enough to pay off debts and maintain stability.

The difference isn’t just numbers—it’s whether the family can grieve without financial chaos.

Why This Matters for Retirement Planning

When we talk about retirement, most people think it’s just saving and investing. The harsh reality: it’s not. Without protection for your family today, all the retirement planning in the world won’t matter.

Life and AD&D insurance are the safety net that help secure your long-term plan. They give you the peace of mind to invest for the future, knowing your family is covered, in the event something unexpected happens.

PG&E provides a foundation with basic life and AD&D coverage. But for most families, it’s not enough on its own. The real value comes from reviewing your coverage, understanding your options, and making sure it fits with your pension, 401(k), RMSA, and other benefits.

Don’t let these benefits sit on autopilot. Take the time to:

• Review your current coverage.
• Update your beneficiaries.
• Run the numbers on what your family would actually need.
• Coordinate your insurance with the rest of your retirement plan.

That way, no matter what happens, you can feel confident your family will be secure.

Life and AD&D insurance at PG&E are more than merely paperwork. They’re part of your PG&E retirement power plan. Used wisely, they can give you and your family the confidence that you’re covered both for the long haul and for the unexpected.