Home Insurance What Is Voluntary Life Insurance? How Does it Works

What Is Voluntary Life Insurance? How Does it Works

by Shagun Saini
what is voluntary life insurance

Here we know what is voluntary life insurance? And it’s working, with some examples of voluntary benefits and difference between basic life and voluntary life insurance. So, let us study what is voluntary life insurance? And all the related information.

What is Voluntary Life Insurance?

Voluntary life insurance is a type of financial protection plan that provides for a cash benefit to a beneficiary in case of the death of the insured, which is provided by the employer. This is a type of group life insurance, provided by the employer to its staff members as a group. Whereas, the 2 common types of insurance offered by the employers are:

  • Basic Group Life Insurance:

A limited amount of life insurance is provided to the employee for which no cost is incurred by the employee.

  • Voluntary Employee Life Insurance:

Here, the employee can further purchase insurance as add on to his insurance for his/her family members such as a spouse, children’s, etc. Here, the employee pays an extra amount of money to purchase the additional insurance, which is deducted from his salary.

The employers offer voluntary life insurance to their employees at discounted rates than normal life insurance. As the employer gets better rates as part of a group policy.

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How Voluntary Life Insurance Works:

The voluntary life insurance is provided to the employees by the employer as a part of group insurance, where the employee can easily purchase life insurance with less premium and some great benefit to employees as previously the purchasing life insurance policy for a single individual might prove to be troublesome. So, voluntary life insurance is provided by insurance companies with some benefits such as:

  • The option is provided to upgrade plans
  • Portability of insurance as even after a change of job or termination the policy exists
  • Quicker rewards and benefits
  • An option where you can purchase plans for related members such as spouse, dependents
  • An option is provided to deduct the number of premiums directly from the salary

What is The Difference Between Basic Life And Voluntary Life Insurance?

Voluntary life insurance is a group life insurance plan offered by the employer and is low of the cost compared to the basic life insurance plan which has a high cost in comparison to voluntary life insurance. Basic life insurance is also known as standard life insurance offered to regular, individuals where he can customize his policy as he has purchased the policy individually.

So, Voluntary life insurance is a part of group life insurance, whereas Basic life insurance is purchased by an individual privately. Voluntary life insurance is less expensive as compared to purchasing the life insurance plan individually.

Frequently Asked questions

  • What is the difference between basic life and voluntary life insurance?

Voluntary life insurance is a group life insurance plan offered by the employer and is low of cost compared to the basic life insurance plan which has a high cost in comparison to voluntary life insurance. Basic life insurance is also known as standard life insurance offered to regular, individuals where he can customize his policy as he has purchased the policy individually. So, Voluntary life insurance is a part of group life insurance, whereas Basic life insurance is purchased by an individual privately.

  • Should you get voluntary life insurance?

Yes, you should get voluntary life insurance as it is quite low in cost compared to other insurance plans and a great benefit for the ones who are not able to get or purchase life insurance privately.

  • What does voluntary mean in insurance?

The term voluntary in insurance depicts that the employees are not forced to have voluntary insurance, they have an option to consider it or not. As, voluntary means freely and without obligation.

  • What is considered voluntary benefits?

Some of the voluntary benefits are as follows:

Life

Disability

critical-illness and accident insurance

as well as pet coverage

ID theft protection

legal services and

financial counseling

  • What are some examples of voluntary benefits?

Some examples of voluntary benefits re as follows:

Vision insurance.

Dental insurance.

Accident insurance.

Critical Illness insurance.

Hospital indemnity insurance.

Disability insurance.

Financial counseling.

Conclusion:

Thus, by now you know what is voluntary life insurance? And it’s working, with some examples of voluntary benefits and difference between basic life and voluntary life insurance. As, Voluntary life insurance is a type of a financial protection plan that provides for a cash benefit to a beneficiary in case of the death of the insured, which is provided by the employer. This is a type of group life insurance, provided by the employer to its staff members as a group. The employers offer voluntary life insurance to their employees at discounted rates than normal life insurance. As the employer gets better rates as part of a group policy. So, we successfully explained what is voluntary life insurance?

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