Voluntary life insurance is an optional benefit provided by employers or membership organizations. This type of life insurance plan allows individuals to choose whether or not they want to participate and pay for coverage. Voluntary life insurance provides a cash benefit to a designated beneficiary, which can be used to cover various expenses if you were to pass away unexpectedly. With different policy types, affordability, and portability, voluntary life insurance offers one way to protect your family and plan for the future. In this article, we’ll help you understand what voluntary life insurance is to help you make an informed decision about whether it’s the right choice for you.
What is voluntary life insurance?
Voluntary life insurance is a type of policy companies offer that allows employees to decide whether to opt-in to coverage. There are two main types of voluntary life insurance policies: whole life insurance and term life insurance. Voluntary whole life insurance provides coverage for the entire life of the insured and also accumulates cash value over time. Alternatively, voluntary term life insurance provides coverage for a specific period, usually with lower premiums than whole life insurance.
Some voluntary life insurance plans offer additional riders or add-ons, such as accelerated benefits or supplemental coverage for partners and dependents. However, even with riders, this type of plan may not provide enough coverage for you and your loved ones. Voluntary life insurance policies are usually guaranteed issue, which means the most coverage you can get is $25,000. If this coverage isn’t enough for your needs, you’ll want to consider supplemental or alternative policies to voluntary life insurance.
Should you enroll in voluntary life insurance?
Your decision to enroll in voluntary life insurance should depend on a few factors, including your overall life insurance needs and how the coverage offered by your employer compares to other available options. Factors to consider include the coverage amount, premium costs, policy terms, and any additional benefits or riders. It may also be beneficial to review any existing life insurance coverage to determine if voluntary life insurance is necessary or can serve as a supplement.
Voluntary life insurance coverage amounts are typically lower than other policy types, while the recommended coverage amount for life insurance is generally 10-15 times your annual salary. So while voluntary life insurance may be affordable, it may be best used as a supplement to your overall life insurance needs. Comparing life insurance plans and considering your family’s unique priorities will help you select the right type and amount of coverage.
Consider Your Life Insurance Options with SelectQuote
Finding the right life insurance policy can seem confusing, especially when you’re considering whether to enroll in a voluntary life insurance plan provided by your employer. With nearly 40 years of industry experience, SelectQuote can help. Our licensed insurance agents are prepared to help you review your needs and priorities so you can feel confident in your decision. With our proprietary technology, we compare rates from several of the nation’s most trusted carriers in just minutes, making it easy to review your options and find a policy that fits you and your needs.
