What is voluntary life insurance?

Voluntary life insurance is a program where an employer provides an optional life insurance policy for its employees. Through this program, individuals are offered a group rate on life insurance, providing savings on premiums to those who would pay more for traditional whole life insurance.

If you’re looking for rates to compare to voluntary life insurance, enter your ZIP code into our free quote tool to see what you could pay.

What is voluntary life insurance?

Voluntary life insurance is an employer-sponsored program that pays out a death benefit if the insured were to die while the policy is in force.

Employer-based insurance programs can typically be cheaper than traditional life insurance because the insurer spreads the risk across a large group of people. Some employers pay for a base level of coverage and then allow the employee to purchase additional coverage.

This can come in handy for people who work in professions viewed as more dangerous by insurers.

Some of the occupations that may benefit most from a voluntary life insurance policy include:

• Commercial fishers
• Logging workers
• Roofers
• Pilots

Jobs with a higher mortality rate will often find it harder to buy affordable life insurance. So, people with the above occupations’ best bet to save might be through an employer-sponsored plan. It’s also a good choice if you don’t qualify for life insurance elsewhere.

Plus, as the name implies, enrolling in the program is entirely optional. Your premiums are automatically taken out of your check each month, so you don’t have to worry about late payments.

What are the top companies that offer voluntary life insurance?

Many insurers are still willing to offer voluntary life insurance for your company. Some of the top life insurance companies include:

• Prudential
• Guardian
• Liberty Mutual
• MassMutual

If you plan to offer your employees an insurance plan through your business, any of the above companies would be a good place to start.

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Is voluntary life insurance worth it?

Not only will voluntary life insurance help protect against any accidents in the workplace, but it also undercuts traditional life insurance rates by providing a group rate. Because of this, voluntary life insurance becomes instantly more valuable to a wide range of people.

Even if you don’t work in a hazardous environment, voluntary life insurance can help you get around other factors that might raise your insurance rates, including:

• Old age
• Medical conditions
• Smoking or dangerous habits

Rates for a voluntary plan are the same for everyone, regardless of individual risk factors.

When a group of employees all pay into the policy, then the insurer won’t lose nearly as much money if one person passes away. For example, a voluntary life insurance policy can lower the average premium by anywhere from 10% to 20%.

Are there other options for voluntary life insurance?

As with most life insurance products, there are further options that your employer can provide. Some of these choices will impact your coverage amount, premiums, and the length of your policy.

If you’re unsure, consider discussing your options with an insurance agent.

What are voluntary term and permanent life insurance?

As with all life insurance policies, you’ll be the one who choose the type of policy, as long as your employer offers both options.

A voluntary term policy would be an insurance policy that only lasts for a specified period of time. It’s a good choice if you need larger amounts of coverage for a short time, such as when starting a family or business. The death benefit will pay out as long as you die during that term period.

On the other side, a voluntary permanent insurance policy would last from the day you pay your first premium until you pass. As long as you pay for the costs, you can expect your insurer to pay out a death benefit when you pass away.

What is voluntary life insurance and AD&D?

According to Vanderbilt University, accidental death and dismemberment is an insurance policy taken out by an insurer if someone dies or is severely injured at work. If this happens, the insurer pays out an agreed-upon amount to that person or their family.

Some sites state that if you already have a voluntary life insurance program, you may not need a voluntary accidental death & dismemberment plan as well. However, it may benefit an insurer to give the employee the most choices available.

What are the benefits of voluntary life insurance vs. term life insurance?

Traditional term life insurance and voluntary life insurance are basically the same. If you have the option of getting one or the other, you can rest a little easier knowing that both policy types offer:

• A death benefit that pays to your beneficiary when you die
• Level premiums for the length of your policy
• The ability to cancel at any time

It’s important with any new life insurance policy that you’re aware of how much you’ll be paying vs. what you’ll get from it. Many insurance companies, be they voluntary or private, will be happy to help you get a quality policy over one that you’d have to cancel later.

How does term life insurance differ from voluntary?

If your policy is a voluntary term life policy, there aren’t really any differences in terms of coverage from traditional term life insurance. The only real differences are that you will likely pay less, and that your coverage may not be portable.

Some insurance programs through employers may have an option to let you keep coverage, known as portablity, but there is no guarantee. However, when you choose a life insurance policy through your employer, you can save at the cost of giving up some choice about your life insurance.

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Voluntary Life Insurance: The Bottom Line

Many life insurance companies offer voluntary life insurance, and employers are more than happy to provide that coverage if it’s needed. While not everyone will decide to opt-in for coverage, voluntary life insurance is an excellent way to save on life insurance premiums.

If you’re looking for quotes to compare voluntary life insurance at work to private life insurance, enter your ZIP code into our free quote tool to see what you could pay.

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