What It Is

More Coverage, Employee Choice, No Employer Cost

Group voluntary supplemental life insurance allows employees to purchase additional life insurance coverage on top of any basic employer-provided life benefit. Employees choose how much coverage they want, elect it during open enrollment, and pay the premiums through payroll deduction.

Because the coverage is purchased through a group, employees access rates that are significantly lower than what they could obtain through an individual policy. There is no medical underwriting required up to guaranteed issue limits, making it accessible to employees who might not qualify for individual coverage on their own.

The employer’s role is to make the benefit available and facilitate payroll deduction. The direct cost of the coverage falls entirely on the employee, making voluntary supplemental life insurance one of the most cost-effective ways to expand your benefits package.

Why It Matters

Most Employees Are Underinsured

Financial planning experts generally recommend life insurance coverage of seven to ten times an individual’s annual income. Most employer-paid basic life insurance policies provide one to two times salary, leaving a significant gap for employees who have dependents, mortgages, or other financial obligations.

Voluntary supplemental life insurance gives employees a convenient and affordable way to close that gap without requiring them to seek individual coverage on their own. The combination of group rates, guaranteed issue provisions, and payroll deduction makes it the easiest and most accessible way for employees to get the coverage their families need.

Offering this benefit demonstrates that your organization takes its employees’ financial wellbeing seriously, which strengthens loyalty and increases the perceived value of your total compensation package.

Coverage Options

Who Can Be Covered

Employee Coverage

Employees elect supplemental life coverage on themselves in increments, typically 1x to 8x their annual salary, up to plan maximums. Coverage amounts above the guaranteed issue limit may require evidence of insurability.

Spouse / Domestic Partner Coverage

Employees can extend supplemental life coverage to their spouse or domestic partner. Spousal coverage is typically offered in flat dollar increments and is subject to its own guaranteed issue limit and overall maximum.

Dependent Child Coverage

Employees may elect a flat amount of life insurance for each dependent child, typically from birth through age 26 or end of full-time student status. A single election covers all eligible children.

Portability

Most voluntary supplemental life plans include a portability provision allowing employees to take their coverage with them if they leave the company, without providing evidence of insurability at the time of transfer.

How It Works

Simple to Offer, Easy for Employees to Use

Open Enrollment

During open enrollment, employees review available supplemental coverage amounts and elect the level that fits their family’s needs and budget.

Guaranteed Issue

Employees can elect coverage up to the guaranteed issue amount without answering health questions or undergoing a medical exam, regardless of health status.

Payroll Deduction

Premiums are automatically deducted from each paycheck, pre-tax in most cases, making the benefit convenient and consistent with no billing hassle for the employee.

Beneficiary Payout

Upon the covered individual’s death, the insurance carrier pays the elected death benefit directly to the named beneficiary, typically as a tax-free lump sum.

The Value

Benefits for Employers and Employees

What Employers Gain

  • Expand the benefits package with no direct premium cost to the business
  • Strengthen total compensation and improve talent competitiveness
  • Demonstrate commitment to employee financial wellbeing
  • Simple administration through payroll deduction systems
  • Increase overall benefits engagement and enrollment satisfaction

What Employees Gain

  • Access to group rates significantly lower than individual policies
  • No medical exam required up to guaranteed issue limits
  • Flexibility to choose a coverage amount that fits their life stage
  • Coverage for spouse, partner, and dependent children
  • Portability to take coverage when changing employers
Let’s Talk

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