Voluntary Life Insurance Premium Calculator
Estimate your monthly payroll deduction for supplemental life coverage.
Total benefit amount you wish to purchase.
Under 30
30 – 34
35 – 39
40 – 44
45 – 49
50 – 54
55 – 59
60 – 64
65 – 69
70+
Rates typically increase in 5-year increments.
Estimated Monthly Cost
How to Calculate Voluntary Life Insurance Rates
Voluntary life insurance is a supplemental benefit offered by employers that allows employees to purchase additional life insurance coverage at group rates. Unlike basic life insurance, which is often paid for by the employer, voluntary life is typically 100% employee-paid through payroll deductions.
The Step-by-Step Formula
Insurance carriers calculate these rates based on "units" of coverage. A single unit is almost always $1,000 of death benefit. The formula used by HR departments and insurance companies is:
(Total Coverage Amount ÷ 1,000) × Monthly Rate per Age Band = Monthly Premium
Key Factors Influencing Your Rate
- Age Bands: Rates are "attained age" based, meaning they increase as you move into new 5-year brackets (e.g., turning 35 or 40).
- Tobacco Status: Many plans charge a surcharge (often 50% to 100% higher) for employees who use tobacco products.
- Benefit Increments: Most plans allow you to buy coverage in increments of $10,000 or 1x to 5x your annual salary.
- Guarantee Issue (GI): This is the amount you can buy without answering medical questions. If you exceed the GI, you may need to provide Evidence of Insurability (EOI).
Real-World Example
Suppose a 42-year-old employee wants $150,000 in coverage. The rate for the 40-44 age band is $0.12 per $1,000.
- Divide coverage by 1,000: $150,000 / 1,000 = 150 units.
- Multiply units by the rate: 150 units × $0.12 = $18.00 per month.
- If paid bi-weekly, the deduction would be ($18.00 × 12) / 26 = $8.31 per paycheck.