Voluntary life insurance is a type of life insurance that is offered by employers as an optional benefit to employees. It provides a death benefit to a beneficiary upon the death of the insured employee, and the employee pays a monthly premium in exchange for the insurers guarantee of payment upon their death. Voluntary life insurance is generally less expensive than individual life insurance policies sold in the retail market because of employer sponsorship.

Voluntary life insurance policies may be available as either term life or whole life insurance. Term life insurance has fixed rates for a specified level term period, such as 10 years, and is less expensive than whole life insurance. Whole life insurance plans can also give employees access to the cash value, which accumulates over time in a tax-free savings account.

Voluntary life insurance is often available to employees immediately or soon after hire, and for employees who opt out, coverage may next be available during open enrollment or after a qualifying life event, such as marriage, the birth or adoption of a child, or divorce. Voluntary life insurance is generally not taxable if the guaranteed payment is less than $50,000.

If youre considering voluntary life insurance, getting coverage through your employer is typically less expensive than getting an individual life insurance plan, and it may be simpler to apply for coverage through your employer than scouting out options for yourself. However, its important to note that coverage may end when employment does, so its important to consider getting enough individual and voluntary life insurance to cover your financial bases.