Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Mar 22, 2021

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The Facts of Life

  • Voluntary life insurance is employer-offered group life insurance offered to employees
  • Voluntary life insurance is low-cost and attainable for those with medical conditions
  • Rates for voluntary life insurance are lower than private policies by 10 to 20 percent

Voluntary life insurance is an essential employer-offered financial protection plan, covering your loved ones from the financial obligations that come with death. Although these are employer-offered, voluntary life insurance policies are similar to the life insurance policies you may be familiar with.

We understand that finding a life insurance policy out of those offered by the best life insurance companies is a complicated process. Keep reading to learn more about the ins and outs of voluntary life insurance and why it may benefit you.

If you’re ready to buy voluntary life insurance, enter your ZIP code above to find affordable voluntary life insurance policies in your area.

What is voluntary life insurance?

Voluntary life insurance is a type of group life insurance offered to employees by their employers. It is sometimes offered to employees as part of their employment package at a low cost or for free.

With a voluntary life insurance plan, the employee pays a monthly premium directly to their employer, and most companies allow the employee to add children or a spouse to the policy.

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Why should I get voluntary life insurance?

Voluntary life insurance is an excellent alternative to a private insurance policy.

Many employees choose this option over purchasing life insurance privately because it is usually cheaper. As a group life insurance policy, voluntary life insurance disperses life insurance costs across a larger group, which covers employees for lower rates.

Voluntary life is also sometimes convertible after employment ends; however, this may require underwriting or additional insurability proof.

What are the types of voluntary life insurance?

Voluntary life insurance comes in two variations: whole life and term life.

These two types work the same as any other whole and term life insurance policy. The only difference is these are provided through an employer rather than the insurance company.

A voluntary whole life insurance policy is active until death and builds cash value over time. Many people choose this type of insurance because of the comfort cash value and not having to buy a new policy bring. A voluntary whole life insurance policy is more expensive than term life.

A voluntary term life insurance policy is more straightforward than whole life and only lasts for a set amount of time. Usually, term life is sold for five, 10, 15, or 30 years at a time, and policyholders will need to buy more coverage once the term is over.

It is more common for employers to offer voluntary term life insurance because of the cheaper aspect. However, some employers provide voluntary whole life insurance.

What are the advantages of voluntary life insurance?

There are quite a few benefits to using a voluntary life insurance policy. Many people buy this type of life insurance because of the minimal amount of underwriting required to get it. Minimal underwriting or no exam gives people that disqualify for life insurance a chance to get it.

The Insurance Information Institute lists participating in group insurance as a way to save money on life insurance. Group life insurance or voluntary life insurance is significantly cheaper than purchasing a private life insurance plan.

A voluntary life insurance plan has rates lower than a private plan by 10 to 20 percent. This gives people an opportunity to be insured when they may not have afforded it otherwise.

Some employers may also allow employees to insure their spouse or children under a voluntary life insurance plan.

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What are the disadvantages of voluntary life insurance?

There are not many disadvantages to voluntary life insurance. However, one that may deter people from buying voluntary life insurance is that coverage after employment may not be a guarantee.

If you have a whole voluntary life insurance policy, then it is more likely that you will be able to carry that over to a new policy when or if you change employers.

With a term voluntary life insurance policy, you will be covered for a fixed amount of time. Once that time is up, you will need to find another coverage option.

The death benefit with a voluntary life insurance plan is a bit more limited than a death benefit offered directly from an insurance company. Insurance companies tend to have a broader range of options based on their underwriting standards, whereas an employer is limited.

If you choose to buy an additional death benefit, you may do so through the insurance company, but you may need to go through a medical underwriting process.

Voluntary Life Insurance: the Bottom Line

Voluntary life insurance is a valuable life insurance option for employees. For those with medical complications, it is an affordable and available option to get coverage.

However, its potential inconvertibility after employment and limited death benefit options are essential downsides to consider when purchasing voluntary life insurance.

We recommend knowing and understanding all of your options before purchasing a voluntary life insurance plan from your employer. Comparing rates, policies, and companies is a great place to start.

If you’re ready to compare voluntary life insurance rates, enter your ZIP code into our free online tool for affordable voluntary life insurance quotes in your area.