Voluntary life insurance is optional life insurance you can buy through your employer. Unlike basic group life insurance (which your employer often pays for), you choose it and you pay for it—usually through payroll deductions.
It’s popular because it’s convenient and sometimes easier to qualify for than buying a policy on your own. But it’s not automatically “better” than individual term life insurance. The real value depends on price, limits, and what happens when you leave your job.
What is voluntary life insurance?
Voluntary life insurance is a type of group life insurance offered at work that employees can elect to purchase. Some plans also let you buy coverage for:
- a spouse/partner
- children (dependent coverage)
Voluntary life insurance meaning (simple)
It’s “life insurance at work that you opt into.”
Voluntary life insurance vs. basic employer life insurance
Most workplaces have two layers:
1) Basic (employer-paid) life insurance
- Often automatic when you start
- Employer pays all or most of the cost
- Coverage is usually limited (commonly a small multiple of salary)
2) Voluntary (employee-paid) life insurance
- Optional add-on coverage you pay for
- Lets you increase the payout amount
- Sometimes includes spouse/child options
Internal link placements
- “basic employer-paid life insurance” → Group Life Insurance Explained
- “increase the payout amount” → Supplemental Life Insurance
Voluntary vs supplemental life insurance (are they the same?)
Not always, but they overlap.
- Voluntary = you pay for it (optional workplace coverage)
- Supplemental = it adds on top of existing coverage (often basic group life)
In real-world employer benefits land, companies sometimes label the same thing as “voluntary,” “supplemental,” or “voluntary supplemental.” So don’t get stuck on the label—focus on the policy terms.
How voluntary life insurance works
Typical flow:
- Your employer offers a plan during onboarding or open enrollment
- You pick a coverage amount (flat dollar amount or multiples of salary)
- Premium comes out of your paycheck
- If you die while covered, the benefit pays your beneficiary
The 3 rules that matter most
If you’re only going to check three things, check these:
- Guaranteed issue limit (how much you can get with no medical questions)
- Evidence of insurability rules (when underwriting kicks in)
- Portability/convertibility (can you keep it when you leave?)
This is where “easy coverage” turns into “surprise problem later.”
What does voluntary life insurance cover?
Most voluntary life policies cover death from most causes, but may include:
- a waiting period for certain situations
- a suicide clause (often time-limited)
- exclusions for fraud or misrepresentation
Some employers also offer add-ons like:
- Accidental Death & Dismemberment (AD&D)
- Waiver of premium for disability
- Accelerated death benefit for terminal illness (varies)
Don’t assume add-ons exist. Verify.
How much voluntary life insurance should you buy?
Use a practical decision method that doesn’t require a finance degree.
Quick method: cover the “big 3”
- Income replacement for a few years
- Housing costs (rent/mortgage runway)
- Major debts + final expenses
If your basic employer life is small, voluntary coverage can close the gap quickly.
“How much…?” → How Much Life Insurance Do I Need?
How much does voluntary life insurance cost?
Cost depends on:
- age (biggest driver)
- coverage amount
- tobacco use (sometimes)
- plan pricing model (age-banded vs flat/composite)
- underwriting requirements
Watch for age-banded increases
Many workplace plans get more expensive as you move into new age brackets. That’s not “bad,” but it means you should re-evaluate every few years.
A common strategy:
- Use voluntary coverage for a baseline
- Add an individual term policy for stable, portable coverage if needed
Pros and cons of voluntary life insurance
Pros
- Convenience (payroll deduction, workplace enrollment)
- Often guaranteed issue up to a limit
- May cover spouse/children easily
- Good for people who need coverage fast
Cons
- Coverage may end when employment ends (unless portable/convertible)
- Premiums may rise with age
- Coverage caps might be too low for families
- Plan features can be less customizable than individual policies
This is the “corporate benefit plan” tradeoff: smooth onboarding, less flexibility.
What happens if you leave your job?
This is the “don’t get blindsided” section.
Possible outcomes
- Coverage ends (most common if no portability/convertibility)
- Portable: you continue the same or similar coverage, paying the insurer directly
- Convertible: you can convert to an individual policy (often more expensive, and may convert to permanent life)
Checklist question to ask HR/benefits:
“Is this plan portable or convertible, and what happens to my rate if I leave?”
When voluntary life insurance is worth it
It’s often worth it if:
- you can get a good guaranteed issue amount
- your employer pricing is competitive for your age
- you want easy enrollment and simple payments
- you only need modest coverage (or you’re supplementing with term)
When you should consider individual term life instead
Consider term life if:
- you expect to change jobs soon
- you want coverage that stays with you long-term
- you want higher limits than the employer plan offers
- you want stable pricing and control
Buying voluntary life insurance safely (copy/paste checklist)
Before enrolling:
- ✅ Confirm max coverage
- ✅ Confirm guaranteed issue amount
- ✅ Check if you need evidence of insurability
- ✅ Look for age-banded rate increases
- ✅ Verify portability/convertibility
- ✅ Confirm spouse/child coverage rules (if relevant)
- ✅ Save plan documents outside your work email
- ✅ Set and review your beneficiary annually
FAQs – Voluntary Life Insurance
What is voluntary life insurance?
Voluntary life insurance is optional life insurance offered through an employer that you choose and pay for, usually via payroll deductions.
Is voluntary life insurance the same as supplemental life insurance?
They’re related but not identical. Voluntary means you pay for it; supplemental usually means it adds coverage on top of basic employer life. Employers may use the terms interchangeably.
Do I need a medical exam for voluntary life insurance?
Often no up to a guaranteed issue limit. If you choose higher coverage or enroll late, you may need evidence of insurability (health questions or underwriting).
Can I keep voluntary life insurance if I leave my job?
Sometimes. It depends on whether your plan is portable or convertible. If it’s neither, coverage typically ends when employment ends.
Is voluntary life insurance enough on its own?
It can be, but many employer plans have caps that are too low for families. Many people pair it with an individual term policy.