What Is Voluntary Spouse Life Insurance?
Voluntary life insurance is a type of insurance that an employee can purchase through their employer. It is not mandatory and is an optional benefit. This insurance is usually cheaper than other types of life insurance, and the enrollment process is straightforward. There are two types of voluntary life insurance: term and permanent. A term policy covers the insured for a set period, while a permanent policy provides coverage for the entire life of the insured.
Voluntary Spouse Life Insurance
Voluntary spouse life insurance is a financial protection plan that provides a cash benefit to the spousal beneficiary of the policyholder upon their death. The employee pays for this plan monthly, and in exchange for this, there will be money given to their spouse if they die. This benefit is usually cheaper than going out and purchasing individual life insurance, but the coverage does not follow the employee if they leave the company.
When employers offer voluntary life insurance as a benefit, it can be divided into two categories: voluntary whole life insurance and voluntary term life insurance. Voluntary whole life insurance covers the entire life of the insured, while voluntary term life insurance provides coverage for a set number of years, usually ranging from 10 to 40 years.
Compare Policies
It is essential to compare different policies when considering voluntary life insurance to find one that meets your needs. Many insurers offer voluntary life insurance plans with additional benefits and riders, such as the option to purchase additional coverage or portability in case of termination or a layoff.
The amount of voluntary life insurance should be based on the policyholder’s needs, such as income replacement, debts, and other expenses. A good rule of thumb is to get a policy that is 10-12 times your annual salary. Voluntary life insurance can provide financial protection for family members or business associates in the event of death or disability.
Conclusion
Voluntary life insurance is an optional benefit that can provide financial protection and peace of mind for the policyholder and their family. It is essential to compare policies and consider the coverage amount, cost, and other factors when deciding whether to enroll in this type of insurance.
| Pros | Cons |
|---|---|
| Low premiums | Does not follow the employee if they leave the company |
| Straightforward enrollment | Not mandatory |
| Customizable coverage |
