Voluntary Life Insurance

AAA

DEFINITION of 'Voluntary Life Insurance'

A financial protection plan that provides a beneficiary with cash in the event that the policyholder dies. Voluntary life insurance is an optional benefit offered by some employers where the employee pays the premium. The premiums, which are based on age and the amount of insurance purchased, may be less expensive than individual life insurance premiums because of an employee group discount.


Some voluntary life insurance plans offer additional benefits, such as the option to purchase insurance above the guaranteed issue amount by providing evidence of good health; coverage portability if the policyholder changes jobs; accelerated benefits if the policyholder becomes terminally ill; and the option to purchase life insurance for spouses, domestic partners and dependents.

INVESTOPEDIA EXPLAINS 'Voluntary Life Insurance'

This type of insurance is a good idea for many people because if they enroll within a short period of becoming employed, they often will not have to provide evidence of good health to be insured up to the guaranteed issue amount. Thus, by participating in a group voluntary life insurance plan, individuals who might not be eligible for life insurance otherwise can obtain coverage. However, the guaranteed issue amount may not provide as much life insurance as the policyholder needs.

RELATED TERMS
  1. Group Life Insurance

    Life insurance offered by an employer or large-scale entity (i.e. ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  4. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
  5. Permanent Life Insurance

    An umbrella term for life insurance plans that do not expire ...
  6. Guideline Premium And Corridor ...

    A test used to determine whether an insurance product can be ...
Related Articles
  1. Home & Auto

    A Look At Single-Premium Life Insurance

    Want to provide for your dependents and finance your own long-term care? Learn more here.
  2. Retirement

    Variable Vs. Variable Universal Life Insurance

    Do you know why you might need one policy versus the other? Read on to find out.
  3. Options & Futures

    How To Avoid Taxation On Life Insurance Proceeds

    Decrease the value of your taxable estate and prevent the tax man from getting you one last time.
  4. Fundamental Analysis

    How do you use Microsoft Excel to calculate liquidity ratios?

    Learn how to calculate the most common liquidity ratios in Microsoft Excel by inputting financial figures from a company's balance sheet.
  5. Professionals

    What are some examples of common fringe benefits?

    Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase total compensation for employees.
  6. Professionals

    How do you protect yourself against sudden unemployment?

    Learn the steps you can take to protect yourself from unexpected job loss and how you can turn a potentially desperate time into a career opportunity.
  7. Insurance

    How do you financially prepare yourself for unemployment?

    Lean some simple ways that you can financially prepare for the possibility of unemployment. Read information for saving money and avoiding debt.
  8. Professionals

    What's the average salary of an actuary?

    Get insight into the intriguing career of risk analysis and forecasting. How much do actuaries make, and how is this field expected to fare in the coming years?
  9. Personal Finance

    What are the top trends in corporate social responsibility?

    Learn about top trends in corporate social responsibility. Companies are increasing transparency, innovating, investing locally and addressing inequalities.
  10. Investing Basics

    What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process philosophy.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center