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. Term Life Insurance

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

    An umbrella term for life insurance plans that do not expire ...
  5. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  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. Brokers

    Is there a downside to having a high liquidity ratio?

    Find out why it might be disadvantageous for a company to have liquidity ratios that are too high, and learn how to find a healthy liquidity range for a firm.
  5. Fundamental Analysis

    What is the difference between revenue and sales?

    Learn to distinguish between a company's revenue and its sales, and see why the distinction is important when analyzing a company's financial performance.
  6. Fundamental Analysis

    What is the difference between revenue and income?

    Understand the difference between income and revenue, how these terms are often confused in day-to-day usage and how to identify each on an income statement.
  7. Fundamental Analysis

    What is the difference between revenue and profit?

    Understand the difference between revenue and profit, two key concepts in business accounting, including where each can be found on an income statement.
  8. A loan against the cash value of your life insurance isn't the best way to raise money – but sometimes it's the best choice you have. How to decide.
    Insurance

    Should You Borrow From Your Life Insurance?

    A loan against the cash value of your life insurance isn't the best way to raise money – but sometimes it's the best choice you have. How to decide.
  9. How to file for a life insurance payout – and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.
    Insurance

    Life Insurance: How Long Does It Take To Get Paid?

    How to file for a life insurance payout – and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.
  10. Investing Basics

    Enterprise Resource Planning System: A How To

    An ERP system won’t transform poor management into good management, but the real-time business analytics can help make good management even better.

You May Also Like

Hot Definitions
  1. Risk-Free Rate Of Return

    The theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would ...
  2. Scarcity

    The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, ...
  3. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The ...
  4. Christmas Tree

    An options trading strategy that is generally achieved by purchasing one call option and selling two other call options at ...
  5. Christmas Club

    A short-term savings account that usually pays out the full account balance to its account holders once each year, right ...
  6. Boston Snow Indicator

    A market theory that states that a white Christmas in Boston will result in rising stock prices for the following year. For ...
Trading Center