Best Voluntary Life Insurance Providers [2024]

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.

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%. The average monthly cost of a life insurance policy is $40 to $55, although it can be higher depending on the level of coverage the applicant wants.

Can I keep my voluntary life insurance if I leave my job?

The one downside of voluntary life insurance is that your coverage will last only for as long as you have that job. If you leave that employer for any reason, you won’t be able to keep your group life insurance policy with that employer.

Because the life insurance company is underwriting your employee base as a whole, it makes sense your policy wouldn’t follow you. Since you are no longer a part of the whole workforce for that employer, the insurer will strongly prefer to underwrite you as an individual.

Some options before and after you leave your voluntary life insurance policy include:

• Signing up for an individual policy
• Going to a new employer that offers group life insurance
• Transfer your current plan to a new employer

If you need to leave a workplace, you should feel free to do so. However, having a life insurance policy as a benefit should be a consideration.

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 chooses 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. (For more information, read our “Accidental Death and Dismemberment vs Life Insurance: Which is better?“)

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

Read more: Who gets life insurance if the insurance company can’t find the beneficiary?

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 the option to let you keep coverage, known as portability, 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 choices about your life insurance.

Read more: How to Choose a Life Insurance Beneficiary

How do I apply for voluntary life insurance?

If you want to apply for a voluntary life insurance policy, check your employer’s benefits plan to find out if your employer offers a life insurance program. Then check if there is an open enrollment period.

You may be able to apply for the voluntary life insurance program when you first start working at the company, but there might be a delay. If you miss that window, you may have to wait a few months for the next open enrollment period.

Case Studies: Top Voluntary Life Insurance

Case Study 1: John’s Story

John, a 35-year-old software engineer, decided to enroll in a voluntary life insurance policy offered by his employer. He wanted to ensure that his family would be financially protected in case of an unfortunate event. After thoroughly comparing various options, John opted for a policy that provided coverage of five times his annual salary.

Unfortunately, a few years later, John unexpectedly passed away due to a sudden illness. Thanks to his voluntary life insurance policy, John’s family received a substantial death benefit, which helped them cover funeral expenses and provided financial stability during a difficult time.

Case Study 2: Sarah’s Experience

Sarah, a 28-year-old marketing professional, recently got married and started a family. Concerned about her family’s financial security, she researched voluntary life insurance policies independently. Sarah was specifically interested in a policy that would cover her mortgage and provide ongoing support for her children’s education expenses.

After comparing different options, Sarah selected a voluntary life insurance policy that offered a term length matching her mortgage duration. This decision proved beneficial when Sarah unexpectedly lost her job and struggled to make ends meet. The policy’s death benefit helped her maintain mortgage payments and continue providing for her children until she found new employment.

Case Study 3: Michael’s Decision

Michael, a 45-year-old small business owner, was concerned about protecting his business and ensuring its continuity in the event of his untimely demise. He decided to explore voluntary life insurance options to safeguard both his family and business interests. After consulting with a financial advisor, Michael chose a policy that provided a combination of personal and key person coverage.

Several years later, Michael was diagnosed with a critical illness that required him to step away from the business temporarily. Thanks to his voluntary life insurance policy, his family received a death benefit, which helped cover medical expenses and provided the necessary funds to hire a temporary replacement for Michael until his recovery.

Case Study 4: Emily’s Planning

Emily, a 40-year-old single parent, prioritized her children’s financial security in the event of her absence. As the sole breadwinner, she understood the need for a voluntary life insurance policy to cover ongoing expenses and education costs. After careful consideration, Emily chose a policy with a death benefit surpassing her annual income and added a rider for college education expenses.

This comprehensive coverage allowed Emily to have peace of mind, knowing that her children would be well taken care of even if she were no longer able to provide for them.

Case Study 5: James and Maria’s Choice

A married couple in their early 50s, James and Maria, wanted to protect their retirement assets. They looked into optional life insurance plans to see whether they could provide extra income during retirement. They chose a policy with a cash value accumulation feature that allowed them to access a portion of the death benefit as a retirement income stream after examining other options.

This decision gave them the confidence to retire comfortably, knowing they had a reliable source of income to support their lifestyle throughout their retirement years.

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.