Definition - What does Voluntary Insurance mean?
Voluntary insurance is a type of workplace benefit. Employers set up these plans so their employees have the option to buy more insurance coverage. Some common types of voluntary insurance include life, dental, disability, vision, and critical illness insurance.
These programs are voluntary because it’s up to the employee whether or not they want to buy coverage. The employer may or may not cover some of the premium payments.
Insuranceopedia explains Voluntary Insurance
Voluntary insurance represents a cost-effective workplace benefit for employers as they do not have to pay any of the premiums. Therefore, the cost to set up voluntary insurance is minimal. At the same time, employees benefit because a voluntary insurance program typically sells insurance coverage at a lower premium cost than the employees would get on the individual market. The insurance company sells coverage at lower group rates because the employer offers the plan to a large number of employees.