Your employer may offer a selection of benefits that include life insurance options. The basic benefits package often provides a minimal amount of life insurance coverage based on your salary with an option to increase your coverage through voluntary life insurance selection. This added coverage is offered as part of your employer's group life insurance plan for a fee taken through a payroll deduction. Voluntary life insurance refers to the additional life insurance options that you can select to complement your existing benefits package.
Identification
Voluntary life insurance is usually offered during yearly benefit enrollment periods or may be offered to new employees when selecting initial benefit options. You may be eligible for this benefit if you are a full-time worker or a part-time worker with more than a defined number of weekly hours. You can identify the voluntary life insurance portions in your package of benefits through the listing of life insurance prices and coverage options. Insurance coverage that does not list an associated cost is the free life insurance portion of your benefits package.
Types
Your employer may offer a variety of voluntary life insurance options including term plans that cover a specified period of time, whole life or universal insurance coverage and accidental death and dismemberment policies. Most selections will allow you to purchase coverage for yourself and may offer family coverage for a spouse or children.
Benefits
Voluntary life insurance coverage may cost less than if you obtained a stand-alone policy. A medical exam requirement may be waived, and you may have the convenience of small payroll deductions on each paycheck. Based on your situation, you may find that signing up for life insurance with your employer is more convenient than searching for life insurance options on your own.
Size
Face values of voluntary life insurance policies values vary, but generally range from your annual salary to several million dollars. The size of the plan determines the costs and medical review requirements. Typically, large coverage options require an additional medical exam, regardless of your company's group policy status. Your employer may offer counseling services that can help you determine a coverage level that meets your financial and family situation.
Considerations
When evaluating voluntary life insurance offers, review the overall cost of coverage and policy restrictions. Determine the portability of the insurance if you leave the company and if accelerated benefits are offered for terminally ill patients. Maximize your coverage options by comparing your company-sponsored plans to policies offered by outside insurance agencies.
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