Why Should I Buy Voluntary Group Term Life Insurance Through My Employer?

October 24, 2019

Voluntary benefits presented by employers to their employees at the worksite are filling a vital need for both employees and workers. They enable employers to shift some of their benefit costs to employees, while also giving employees the advantage of having their employer do all the research to present the most competitive products. This is true when it comes to term life insurance. A voluntary group term life insurance product offered to employees by their employers is likely to be a high quality product, provided by a reputable, fiscally-strong insurance company.

What to Look for in Voluntary Group Term Life Insurance Policy

It’s a fact that many Americans will change their jobs multiple times over the course of their careers. That’s why one of the most important features to seek in a voluntary group term life insurance policy is portability. That gives you the option to take the policy with you if you change jobs or even retire. This is a feature that does not depend on what your health status is at any given time. The most competitive voluntary group term life insurance policies offer this feature.

Another important feature to seek in a voluntary group term life insurance product is a guaranteed issue provision for individuals up to age 65 with flexible terms of 10, 15 or 20 years. A range of coverage with face amounts from, for example, $5,000 to $300,000, gives individuals the ability to purchase coverage within their means. Most insurers will have a maximum on the amount of coverage that can be purchased based on an individual’s annual income (e.g., not to exceed five times the individual’s annual income).

Look for voluntary group term life insurance policies that also offer options for spouse and child coverage. Often these coverages will have some limitations (e.g., spouses can be added to the plan and covered by an amount equal to 50% of the insured worker’s policy value with a maximum death benefit of $150,000 for the insured ) and eligible dependents up to age 26 (children) can be covered up to an amount of $10,000.

Death Benefits

Voluntary group term life insurance policies offer various maximum death benefits (e.g., up to $300,000 for the insured) and some also offer an accelerated death benefit rider at no extra cost. These accelerated death benefits allow for a portion of the policy’s death benefit (up to $150,000) to be paid before the death of an insured individual if he/she is diagnosed with a terminal illness with a life expectancy of no more than 12 months. Another option offered in some voluntary group term life insurance policies is an accidental death and dismemberment benefit rider which provides optional coverage for an accidental death or dismemberment resulting from an accidental bodily injury sustained by the insured.

Ask your employer about a voluntary group term life insurance policy to gain critical financial protection for you and your family.