Voluntary Life Insurance Coverage: An Expert Guide (2024)

What is voluntary life insurance? If you work in a dangerous field or have a risky lifestyle, it could be your ticket to getting affordable life insurance coverage. Depending on your employer’s enrollment, it may even provide additional benefits and coverage you may not get privately.

What is a voluntary life insurance company? Enter your ZIP code into our free quote tool to find the most affordable voluntary life insurance companies near you.

Companies That Offer Voluntary Life Insurance

With a voluntary life insurance policy, your plan provides a cash benefit to your beneficiary when you die. Voluntary life is an optional benefit offered to employees by employers. Employer-sponsored benefits are typically cheaper than individual life insurance policies. 

Prices and coverage options for group life insurance (another name for voluntary life insurance) vary depending on the business applying for coverage. Some of the most popular voluntary life insurance companies include:

• Guardian
• Nationwide
• New York Life
• Transamerica

The best insurance companies can allow employees to opt into life insurance coverage. Then, if you die while the policy is in force, your family will be provided with the death benefit, and with it, some financial security in your absence.

What is voluntary life insurance?

Voluntary life insurance is a policy instituted by an employer that allows employees to pay a monthly premium for insurance coverage. If the insured employee dies while the policy is in force, the death benefit will be paid out to the beneficiary. (For more information, read our “How to Choose a Life Insurance Beneficiary“).

Voluntary life insurance is also known as group life insurance due to the insurance company providing coverage for a group of employees. For some people, voluntary life insurance is a more affordable option for getting coverage.

People with high-risk jobs, like those in the commercial fishing and logging industries, might have trouble getting an individual life insurance policy.  So, voluntary life insurance through an employer can be very beneficial for these workers.

Types of Voluntary Life Insurance

As with traditional life insurance policies, there are variations inside the voluntary life insurance market. Depending on your workplace and circumstances outside of it, you may value one insurance policy higher than another.

There are two types of voluntary life insurance policies that closely resemble traditional life:

• Term life – What is voluntary term life insurance? It lasts for a period of your life and pays out if you die during that period, as long as your payments are current.
• Whole life – This life insurance policy protects the insured for their entire life, paying out the cash value that the policy accrued in addition to the death benefit.

There is also the option to add voluntary life insurance as supplemental coverage to your already existing policy outside of work. Volunteer term life insurance can help provide extra benefits for a period where you might be expecting more expenses than usual.

Read more:

• What are life insurance riders?
• What are the benefits of having life insurance?
• What is group life insurance?

Riders on Voluntary Life Insurance

Some employers may enroll in a policy that provides additional coverage in the form of riders. Riders can provide extra coverage for family members, advanced need benefits, and even a higher death benefit if you die under certain circumstances. (For more information, read our “Do riders increase the cost of life insurance?“).

Some of the more popular life insurance riders include:

• Accelerated need – If you become sick or seriously injured, you can receive a portion of the death benefit ahead of time to help pay for bills and expenses.
• Portability – If you want to keep your life insurance policy after leaving the employer, this rider will ensure that your coverage goes with you.
• Payroll deductions – With your permission, the policy may take the premium automatically out of your paycheck each month, keeping you from having to worry about the bill.

There are also likely to be other voluntary life insurance riders that can help provide benefits for various circumstances.

Voluntary Life vs. Standard Life Insurance

If you’re trying to decide between voluntary and standard insurance policies, you’ll probably want to evaluate your circumstances to determine which will best suit your life.

Underwriting Processes

Insurance underwriting is the process in which an insurer looks at different factors in your life to determine how risky you are to insure. These factors include:

• Medical history
• Credit history
• Criminal history
• Medical exam results

The purpose of underwriting is to root out any risks that might cause the insurance company to have to pay out the death benefit before they can make a profit on the policy. Anything that stands out to your insurance company as potentially risky may cost you more in monthly premiums.

Some more extreme risks like dangerous occupations or pre-existing conditions may keep you from getting a life insurance policy altogether. In these instances, having a voluntary life insurance policy through your employer can help.

Voluntary life insurance programs offered through employers are often pre-underwritten for that job, which means that you’ll be able to get a policy at much more affordable rates than if you were to look for a private life insurance policy.

Death Benefit Amount

The death benefit is also something to consider when you look for a new life insurance policy. You won’t want a death benefit that’s too low, as you want to take care of your loved ones when you pass.

If you’re placed in a higher risk category by the insurance underwriters, then you’re more likely to get a lower death benefit if you get one at all. Voluntary life insurance can help ensure you get enough coverage, either as your sole policy or as supplemental coverage to a policy you already have.

Other Life Insurance Options

If your employer doesn’t offer voluntary life insurance or doesn’t fit your needs, you may be looking for other life insurance options. Outside of group life insurance, you can find a wide variety of traditional policies that will be much more customizable than voluntary insurance.

According to the Insurance Information Institute, some principal examples of the types of life insurance policies available on the private market include:

• Term life – The simplest form of life insurance provides coverage and equal premiums for a fixed term.
• Whole life – Provides coverage for your entire life and accrues cash value in a savings account that you can borrow against.
• Variable life – Your death benefit is invested in multiple funds and can grow or shrink depending on how the market performs.

In addition to these policies, some subcategories and riders can create a more customizable form of life insurance that fits your needs.

Case Studies: Real-Life Examples of Voluntary Life Insurance Coverage

Case Study 1: SecureLife – The Importance of Early Enrollment

John Davis, a 32-year-old software engineer, decided to enroll in voluntary life insurance offered by SecureLife to secure his family’s financial future. Unfortunately, just a year after his enrollment, John was diagnosed with a critical illness and passed away shortly thereafter. Thanks to his early enrollment, John’s family received a substantial life insurance payout from SecureLife.

This financial support helped them cover funeral expenses, outstanding debts, and provided a financial cushion for his spouse and two young children.

Case Study 2: GuardianShield – Customized Coverage for Unique Needs

Emily Carter, a freelance graphic designer, recognized the need for additional life insurance coverage beyond her employer’s basic plan. She turned to GuardianShield to explore customizable options. After assessing her financial situation and personal circumstances, Emily opted for a voluntary life insurance policy that included critical illness coverage.

A few years later, she was diagnosed with cancer. The comprehensive coverage from GuardianShield provided Emily with a lump sum payment, which she used to cover medical bills, alternative treatments, and additional living expenses during her recovery. (For more information, read our “Life Insurance Guide for Cancer Patients“)

Case Study 3: SafetyNet Insurance – Income Replacement During Disability

Sarah Johnson, a 40-year-old marketing manager, understood the importance of safeguarding her family’s financial well-being. She enrolled in voluntary life insurance with SafetyNet Insurance, including a disability income rider. Unfortunately, Sarah suffered a severe accident that left her unable to work for an extended period.

Thanks to her coverage, SafetyNet Insurance provided a monthly disability income benefit, which helped Sarah and her family maintain their standard of living while she focused on her recovery.

Case Study 4: UnityLife Assurance – Additional Protection for Expanding Families

David and Lisa Anderson, a young couple expecting their first child, decided to explore voluntary life insurance options to protect their growing family. They turned to UnityLife Assurance, which offered coverage specifically designed for young families. Soon after their daughter was born, David unexpectedly passed away due to a tragic accident.

UnityLife Assurance’s comprehensive policy provided Lisa with a substantial life insurance payout, enabling her to pay off outstanding debts, secure her child’s future education, and maintain their current lifestyle during this difficult period.

Case Study 5: LibertyShield – Coverage for High-Risk Professions

Mike Thompson, a 45-year-old firefighter, sought additional life insurance coverage due to the inherent risks associated with his profession. Recognizing the need for a policy tailored to his high-risk occupation, Mike chose LibertyShield as his provider. Unfortunately, Mike suffered a line-of-duty injury that permanently disabled him and ended his firefighting career.

Thanks to LibertyShield’s specialized coverage, Mike received a disability benefit that helped him transition to a new career and provided ongoing financial support for his family’s needs.

Voluntary Life Insurance: The Bottom Line

What is a voluntary life insurance company?

A voluntary life insurance company can provide employees with comprehensive coverage at more affordable rates. Voluntary life insurance is essential for those who work in dangerous fields that might have difficulty getting cheap life insurance otherwise.

Enter your ZIP code into our free quote tool to compare life insurance rates and see how much you could save.