Insurance acts as an essential part of today's world. Due to the uncertainty of life in this unpredictable world, a person must have his or her future ensured. Life insurance is the most common type of insurance which is normally purchased by every person in this world. It acts as a backup plan for his/her family members to maintain the prosperity and living standard of the family.
Voluntary life insurance refers to the type of insurance which acts as a security of the family members of the insuree and provides an adequate amount of funds after the death of the insured person. It is quite different from other Life Insurance as it has a voluntary nature that is it can or cannot be provided by the employer. As the employer provides this kind of insurance, it is normally cheaper than the other insurance policies which are purchased by people from private companies. The employees need to pay the monthly premium out of the salary that they get for the work done for the company. This premium keeps accumulated and after the death of the person, the whole amount is given to his/her family members. The amount of premium depends upon the amount of policy taken by the employee. It is a kind of additional support that the employer provides to his/her employees while he works in that company.
There are two types of Voluntary Life Insurance which are discussed below -
Voluntary Term Insurance - It is a type of voluntary life insurance which is normally given for a certain period that is 5, 10, 15 or 20 years. Normally, the premium amount is less as compared to other types of insurance. It is normally considered as an addition to the whole life insurance policy, for example, if a person feels that his/her whole life insurance policy will not provide adequate funds in the future then he takes voluntary term life insurance policy and can ensure the safety of the family members.
Voluntary Whole Life Insurance - This kind of insurance policy is normally given for the lifetime of the employee. The premium amount exceeds than that of voluntary term insurance, and hence it is expensive. Moreover, an employee can withdraw funds from this kind of insurance policy if he/she faces any crisis. This may reduce the amount of fund family members were going to get after his/her death, but if the employee doesn't borrow or advances any loans from the policy amount, the person will get a good amount of money along with interest on it.
Hence, if someone works in a company which is providing Voluntary Life Insurance as a kind of additional benefit other than salary and different perks, it is worth for that employee to invest in that insurance.