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What is voluntary life insurance?

On your life insurance journey, you may come across the phrase “voluntary life insurance.” This phrase may strike you as a bit funny – is there such a thing as involuntary life insurance, where you are forced to be insured against your will? (Rest assured, there isn’t.)

No, voluntary life insurance is a type of life insurance offered through your employer. But you don’t really volunteer for it, at least not in the same way you might volunteer for a service day with your team. Yes, you choose to opt for voluntary life insurance, but you pay for your insurance coverage.

So does it make sense to get voluntary life insurance? What are the costs and potential drawbacks? And what is voluntary term life insurance, and is it different from other types of insurance?

Take it easy, friend. The answers you are looking for are below.

In this article:

What is voluntary life insurance?


7;s zoom out a bit. Life insurance, in short, is a type of insurance that pays a death benefit to your chosen beneficiaries in the event that you die while covered. It’s a way to provide financial protection to your loved ones, so they can still afford the things you used to pay for (like housing, food, tuition, etc.).

If you have dependents – such as children, a partner or spouse, or someone else who depends on you and your income for their financial well-being – life insurance is probably a good idea.

Voluntary life insurance is usually offered as an employment benefit, similar to group life insurance. You either pay a regular premium, or have the premium deducted from your paycheck, in exchange for life insurance. (In some cases, a small portion of group life insurance coverage may even be available for free.)

Some benefits of voluntary life insurance include the convenience – you don’t have to shop around, and you can set up payments through work. Many policies are guaranteed issue policies, meaning you cannot be denied coverage, even if you are in poor health or have a pre-existing condition. And because it’s issued to a group of employees, it’s often cheaper than a comparable individual policy.

That said, there are also some downsides.

You may be limited in coverage. For example, a company may offer insurance worth 100% to 200% of your annual compensation. Another may cover it between $50,000 and $250,000 in coverage. Life insurance may not be enough for most people.

You should also ensure that your policy is portable. That is, if you leave your job – for another, higher paying job, or because you are laid off – your policy will continue, leaving your life insurance coverage in place. (You may need to fill out paperwork within a month or two of your severance pay.) After all, recent statistics suggest that the average American will hold about 12 jobs in their lifetime, so you want to make sure you can take your policy with you.

What is voluntary term life insurance?

Which brings us to volunteerism term life insurance. Simply put, this is life insurance that lasts for a certain number of years – the “term”, if you will. (And you will.)

This is different from voluntary whole life insurance, a type of voluntary life insurance that is designed to last a lifetime. Sometimes whole life policies also accumulate cash value, meaning you can borrow against the value of your policy. Sounds good, right? But there’s a big downside: These policies often cost a lot more in premiums.

Voluntary life insurance is usually more affordable and terms last 10, 20 or even 30 years. If the cost is affordable for your family (or if it’s free), it doesn’t hurt to have that insurance in place.

Voluntary life insurance versus regular life insurance

As with voluntary life insurance, there are two primary types of life insurance on the open market. Whole life insurance, coverage designed to last a lifetime. And term life insurance, which lasts a certain number of years, usually between 10 and 30.

Because whole life insurance covers the years when you are older and likely to be in poorer health, whole life insurance is often significantly more expensive than whole life insurance.

Also, because you usually have a lower income in your later years – and usually fewer expenses, since you’ve usually paid off a mortgage and any children will hopefully be financially independent – your death is less likely to cause financial hardship for your family .

For example, for a $250,000 whole life policy from State Farm, a 35-year-old man in excellent health would pay an estimated $284 per month.

However, life insurance only applies during the years you need it. You can buy insurance for 10, 15, 20, 25 or even 30 years. And at Haven Life, you can buy insurance worth up to $3 million (or as little as $250,000). And you can do it while paying a low monthly premium that remains the same throughout your policy term.

Not sure how much coverage you need or how long you need it for? A common rule of thumb is to buy life insurance worth 5 to 10 times your annual salary.

And generally, you want to buy a term that lasts until the aforementioned milestones: Until you pay off your mortgage, your children achieve financial independence, and/or you retire. Essentially until you no longer have large debts or financial dependencies. (You can also use our helpful life insurance calculator.)

Remember when we said that life insurance can cost almost $300 a month? Keep that in mind when looking at some examples of what people in excellent health can pay per month for Haven Term.

Age Sex Police length Coverage amount Monthly premium
25 Male 30 years $250,000 $17.49
25 Woman 30 years $400,000 $19.55
35 Male 20 year $500,000 $20.72
35 Woman 20 year 600,000 USD $19.75
45 Male 15 years $750,000 $50.62
45 Woman 15 years 1,000,000 USD $49.40
Estimates based on pricing for qualified Haven Term applicants in excellent health. Price differences will vary depending on age, health status, coverage amount and term length. These rates do not reflect rates for applicants in DE, FL, ND, NY and SD.

Find the right life insurance for you

No matter which route you choose, life insurance offers the peace of mind that comes with knowing that if something happens to you, your loved ones are financially protected.

For many people, whole life insurance is a great idea, an affordable option for that much-needed peace of mind. Start your journey by getting a free life insurance quote online today.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they fit your situation.

Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to provide and should not be used for tax, legal or investment advice. Individuals are encouraged to obtain advice from their own tax or legal advisor.

Our disclosures

Haven Term is a term life insurance policy (DTC and ICC17DTC in some states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in some states, including NC) issued by CM Life Insurance Company, Enfield, CT 06082. Police and driver form numbers and features may vary by state and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by AM Best Company as A++ (Superior; Top category of 15). The rating is valid from 1 April 2020 and is subject to change. MassMutual has received different ratings from other credit rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The driver is not available in all states and is subject to change at any time. Neither Haven Life nor MassMutual is responsible for the provision of the benefits and services made available under the Plus Rider, which are provided by third party providers (partners). For more information about Haven Life Plus, visit: https://havenlife.com/plus

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