What Is The Difference Between Term Life Insurance And Voluntary Term Life Insurance?
Many companies and organizations make group life insurance available to employees as a workplace benefit. Generally speaking, there are two forms of workplace group life insurance; either one or both may be offered to employees. Let’s take a closer look at term life insurance and voluntary term life insurance.
| Term Life Insurance | Voluntary Term Life Insurance |
|---|---|
| A term life insurance policy provides coverage for a specific number of years. It is sometimes called “pure life insurance” because, unlike whole life insurance, there’s no cash value component to the policy. | Voluntary term life insurance coverage is typically offered on a year-by-year basis, so you can choose to renew, change, or cancel each year (i.e., during open enrollment). Your rates will go up with time – either annually or every few years as you enter a new age bracket. |
| Voluntary term life insurance can be used to complement voluntary permanent life insurance coverage. While the cost for a given level of benefit is higher than term at first, your rates never increase, letting you lock in pricing for a smaller, life-long policy that is portable and can cover final expenses and other needs after children are no longer dependent on your support. | |
If you have a family, you probably want enough to replace the income you would have provided and cover the extra costs they’ll face in your absence. Voluntary term life insurance may not provide enough protection for all your needs, so it’s important to evaluate your options and consider the amount of coverage you need.
Other examples of voluntary employee benefits include disability insurance, critical illness insurance, pet insurance, ID theft protection, and legal services.
