What Is Employee Optional Life Insurance?
Optional Life Insurance (Optional Life) is an additional insurance option available to employees and eligible dependents. It increases the amounts paid as part of existing Life or Dependent Life Insurance policies. Individuals can apply for a combination of Life and Optional Life up to the overall Life Insurance maximum. The maximum is usually based on the size of the employer.
| Group Size | Overall Life Insurance Maximum |
|---|---|
| 2-9 | $850,000 |
| 10-24 | $1,000,000 |
| 25-49 | $2,000,000 |
| 50-99 | $5,000,000 |
| 100-199 | $10,000,000 |
To apply for Optional Life, speak with your Advisor or Plan Administrator. You will need to submit medical evidence for all amounts of Optional Life. The Insurer will add Optional Life to your policy if you are approved, and you will see the appropriate deductions removed from your paycheck.
Optional Life is also available to spouses, usually up to a separate maximum determined by the Insurer. However, dependent children are not eligible for Optional Life but may be covered under Dependent Life Insurance.
Increasing Life Insurance payments through Optional Life makes sense for demographics and life stages where additional protection is needed. For example, a married person with children who rely on them to provide an income may want to consider Optional Life. If they were to die, the family would be left without a source of income, and paying for living expenses would become challenging.
For instance, Beth used Optional Life to better protect her family. Beth started working at a small tech startup at the age of 23 and was offered a Life Insurance policy for $50,000. At that time, Beth was young, healthy, and single, so she didn’t think much about the policy. But after ten years, Beth got married, had two children, purchased a new home and two cars, and had several debts to pay off. Beth realized that $50,000 was not enough to cover expenses and protect her family financially. She spoke with her Plan Administrator and applied for Optional Life. She was approved for $750,000, for a total of $800,000 when her original Life Insurance policy was included. This amount could cover the family’s existing debts and allow them to maintain their standard of living in the event that Beth was no longer able to provide for the family.
Optional Life Insurance provides additional protection to employees and eligible dependents. To know more about Optional Life, speak with your Advisor or Plan Administrator.
