What is voluntary life insurance?

Are you selecting employee benefits at work and wondering what voluntary life insurance is? We’ve got you! Check out this Q&A for everything you need to know about voluntary life insurance.

What is voluntary life insurance?
Voluntary life insurance is simply life insurance coverage that’s offered at work as part of your employee benefits package. Life insurance is a product that promises to pay the person or people you choose (known as beneficiary/[ies] a sum of money (known as a death benefit) in the event you pass away.

How is voluntary life insurance offered?

Here are a few ways voluntary life insurance is typically offered:

• Some businesses give employees a basic minimum amount of life insurance, such as one to two times their annual salary, at no cost to employees.
• Some businesses give employees a basic minimum amount of life insurance at no cost to employees, while also giving employees the option to purchase additional coverage.
• Some businesses give employees the option to buy life insurance coverage at an affordable group rate.

What does guarantee issue mean?

Guarantee issue means you don’t need to answer health questions or take a life insurance medical exam to qualify for coverage. Basic minimum amounts of voluntary life insurance are often offered guarantee issue. However, health questions and/or a medical exam are sometimes required to purchase additional coverage.

What are the types of voluntary life insurance?

Voluntary life insurance typically falls into two categories of coverage:

• Term: Term life insurance is a type of policy that pays a death benefit if you pass away during a specified period, known as the “term.” For example, a term could be 10, 20 or 30 years, or to-age-65, depending on the policy.

• Permanent: Permanent life insurance is a category of coverage that can be kept for a lifetime. Whole life and universal life are two examples of permanent life insurance. Permanent policies are also known for building cash value.

How much does voluntary life insurance cost?

Voluntary life insurance offered through work is typically free or inexpensive for employees.

How do I pay my voluntary life insurance premiums?

Premiums can usually be paid through payroll deduction. This means they come straight out of your paycheck, so you don’t need to worry about remembering to pay!

Is voluntary life insurance enough?

For many people, voluntary life insurance they get through work isn’t enough to meet their family’s total life insurance needs. That’s why many people decide to also purchase their own individual life insurance policies outside of work.

What happens if I change jobs or retire?

That depends! Some voluntary life insurance policies simply end when an employee no longer works for a company. Other voluntary life insurance policies are “portable,” which means the employee can continue their coverage at their own expense when they leave the company.

Should I sign up for voluntary life insurance?

If your employer is offering life insurance at no cost to you, there’s no reason to not sign up for this coverage! And even if your employer isn’t offering free coverage, voluntary life insurance is typically a very affordable and convenient way to secure life insurance coverage. Remember that life insurance is one of the very best ways to protect the financial future of your loved ones!

Still have questions? Optavise is here to help!

We get that life insurance is complex. Our agents are experts at helping people understand life insurance so they can make the most of their coverage!