ANSWERS: 1
  • Voluntary life insurance is coverage offered through a third-party insurer as a way for employees to supplement their group coverage. It differs from the group life policy in that it is sold and underwritten individually instead of on a group basis.

    Time Frame

    Voluntary life insurance is typically available once during the year, usually when enrollment in the company's fringe benefit plans is offered. It is often set up to be paid through payroll deduction.

    Types

    The typical types of life insurance may be available on a voluntary basis. These include whole life, term life and universal life, depending on the plans that the employer makes available.

    Benefit to Employees

    The main benefit of voluntary life insurance is that the insured has the ability to purchase coverage over and above what is offered through the employer's standard benefit package, usually at group rates. Depending on the type and amount purchased, the underwriting standards may be less restrictive than if the employee tried to purchase insurance on the open market.

    Benefits to Employers

    Since a third-party insurance company normally handles the enrollment and underwriting, it handles the bulk of the administrative tasks. The employer's main role is to set up the payroll deduction process.

    Portability

    A big advantage of voluntary life insurance plans is that they are portable. As opposed to the standard group life plan that may terminate on or shortly after the end of employment, a voluntary policy remains in effect even after job separation as long as the employee continues to pay the premium on her own.

    Source:

    LifeInsuranceInfo.us

    Life Benefits.com

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