The cost of life insurance is generally determined by using the uniform premium rates provided by the IRS in Table 2-2 of Publication 15-B (see below). These rates set the cost of each $1,000 of group-term life insurance for each month based on your age as of the end of the calendar year. The dollar amount in Form W-2, Box 12 with code “C” is the amount your employer paid to provide you with group term life insurance over $50,000 and is subject to Social Security, Medicare and income taxes; however, no taxes are withheld. The amount of uncollected Social Security tax is reported in Box 12 with code “M” and uncollected Medicare tax is reported in Box 12 with code “N”.
Table 2-2. Cost Per $1,000 of Protection for 1 Month
Age/ Cost
Under 25 $ 0.05
25 through 29 0.06
30 through 34 0.08
35 through 39 0.09
40 through 44 0.10
45 through 49 0.15
50 through 54 0.23
55 through 59 0.43
60 through 64 0.66
65 through 69 1.27
70 and older 2.06