Open enrollment usually arrives with a thick packet and very little time to read it. Many employees check the boxes they recognize, such as health insurance, dental, and retirement savings plans, then skim past the pages that follow. Those pages often hold the voluntary benefits, and for many households they deserve a second look.
Below, we walk through the voluntary benefits examples employees actually use and value, explain how optional coverage fits alongside the rest of your benefits package, and offer a practical way to decide what belongs in your plan. As fiduciary advisors, we approach these choices the way we approach any financial decision: start with the gaps in your situation, then weigh the cost of filling them.
Key Takeaways
- Voluntary benefits are optional coverages offered through your employer, typically paid through payroll deductions and often priced at group rates.
- The voluntary coverage people tend to value most protects income and savings, including disability insurance, life insurance, critical illness, and accident insurance.
- Lifestyle options like legal services, identity theft protection, and pet insurance can be worthwhile, though their value depends heavily on your household.
- Supplemental coverage earns its place when it fills a specific gap in your health insurance plans, emergency reserves, or estate plan.
- Good benefits planning ties enrollment decisions back to your broader financial plan, including retirement savings and tax strategy.
What Are Voluntary Benefits?
Voluntary benefits are coverages and programs your employer makes available but that you generally pay for yourself. The company selects the insurance plans, handles benefits administration, and often negotiates discounted rates. Employees decide whether to enroll, and premiums come out of each paycheck through convenient payroll deduction.
Core benefits work differently. Medical coverage, employer-paid basic life insurance, and contributions to retirement savings plans are usually subsidized by the company and form the base layer of compensation. Some employers also cover dental insurance and vision insurance, while others list them as optional benefits. These additional benefits sit on top of that base, giving eligible employees room to shape coverage around their health, family, and finances.
Three features make voluntary coverage worth understanding. Group underwriting often means limited medical underwriting, with no medical exam and only a few health questions up to a set coverage amount. That can matter if your health history would complicate an application for individual insurance. Payroll deductions keep coverage in force without another bill to track. Some policies are also portable, so coverage may continue when an employee leaves, although terms and pricing vary widely by carrier.
Voluntary Benefits Examples Employees Actually Value
The voluntary benefits options on an enrollment platform can run long. In our experience, the types of voluntary benefits that hold up over time share a common trait. They protect something you would struggle to replace, whether that is a paycheck, a savings balance, or a plan for your family.
Supplemental Disability Insurance
Your ability to earn income is likely your largest financial asset during your working years. Many employers provide basic long-term disability insurance, but group plans often replace only a portion of base pay and frequently cap the monthly benefit. For higher earners and executives, that cap can leave a meaningful share of income unprotected.
Supplemental disability coverage can help close that gap. Tax treatment matters here, too. When you pay premiums with after-tax dollars, benefits are generally received tax-free, while benefits from employer-paid coverage are usually taxable.
Voluntary Life Insurance
Employer-paid life insurance is commonly set at one or two times salary, which rarely covers a mortgage, education costs, and years of lost income for a young family. Voluntary life lets you buy additional coverage for yourself, a spouse, or children, usually as term coverage, though some employers also offer whole life insurance that builds cash value.
Deciding how much coverage you need starts with the death benefit your family would actually rely on, then works backward to cost. It is also worth comparing group rates to an individual policy from a life insurance company. Group pricing frequently rises in age bands, and coverage may end or become expensive to continue if you change jobs. Healthy younger workers sometimes find better long-term value in an individually owned policy.
Critical Illness Insurance
Critical illness coverage pays a lump sum if you are diagnosed with a covered condition, such as certain cancers, a heart attack, or a stroke. Many carriers can send the payment by direct deposit, and the money is yours to use as needed, whether for deductibles, travel to a treatment center, or household bills while you recover. This kind of supplemental health coverage can be especially useful for families with a high-deductible health plan or a history of health problems.
Hospital Indemnity and Accident Insurance
These policies pay fixed cash benefits for specific events. Hospital indemnity coverage pays for hospital stays, while accident insurance pays for injuries like a fracture or emergency room visit. Neither replaces health insurance. Instead, they help absorb the out of pocket expenses that tend to arrive at the same time as an unexpected health event.
Dental and Vision Coverage
When dental coverage and vision insurance are offered on a voluntary basis, they are often among the most widely used benefits because nearly everyone needs routine cleanings, exams, or glasses. The math is fairly simple. Compare annual premiums to the care your family realistically expects to use.
Legal Services and Identity Theft Protection
Group legal plans often provide access to attorneys for routine legal services, and many include basic estate documents like wills and powers of attorney. For households that have put off estate planning, that can be a helpful first step. Families with larger estates, business interests, or blended family considerations usually need more customized estate planning coordination. Identity theft protection, meanwhile, offers credit monitoring and restoration support if your information is compromised.
Pet Insurance and Lifestyle Benefits
Pet insurance has become one of the more popular optional benefits. Veterinary costs for surgery or chronic conditions can be significant, and coverage turns a surprise bill into a predictable monthly expense. Some employers also offer car insurance and home insurance at group pricing, along with perks like a discounted gym membership. These can be convenient, but it pays to compare them against quotes you could get on your own.
Employee Assistance Programs and Mental Health Support
Employee assistance programs typically offer short-term counseling, mental health resources, and referrals for issues like stress, grief, or child care and elder care needs. They are frequently employer-paid and underused. If your company offers one, it is worth knowing how to access it before you need it.
Financial Wellness and Planning Resources
More employers now offer financial education, budgeting tools, or access to planning guidance. These resources can be genuinely helpful. When advice is part of the offering, ask whether the person providing it acts as a fiduciary, and whether recommendations come with insurance products or other sales attached.
Why Voluntary Benefits Matter More Now
Rising healthcare costs are a big part of the story. Employers expect health benefit costs per employee to climb by nearly 7% on average in 2026, according to preliminary results from Mercer’s 2025 National Survey of Employer-Sponsored Health Plans. When companies manage those increases through higher deductibles or cost sharing, workers carry more of the risk, and supplemental coverage becomes one way to absorb it.
Employers are paying attention as well. A 2025 report from the Employee Benefit Research Institute found that 85% of surveyed employers cite employee satisfaction and morale as a key reason for offering voluntary benefits. Retaining employees, attracting new talent, and staying competitive followed close behind.
There is a catch. The same research found that benefits do not always reach workers efficiently, and 63% of brokers said better educational tools would improve how employees use them. In practice, plenty of people either skip coverage they would benefit from or buy policies that duplicate protection they already have. Personalization helps. Mercer notes that employees who can tailor their benefits are far more likely to feel their employer cares about their wellbeing, which tends to support job satisfaction across the workforce.
How to Evaluate Your Coverage Options During Open Enrollment
A policy can be well priced and still be the wrong fit for your family situation. Before adding individual benefits, it helps to work through a few planning questions in order.
Start With the Gaps
Look first at what you already have. What is your health plan’s out-of-pocket maximum? How many months of expenses could your emergency fund cover? What would your family need if your pay stopped? Coverage that fills a real gap tends to be worth its premium. Coverage that duplicates existing protection usually is not.
Compare Group and Individual Pricing
Group rates are convenient, but they are not automatically the lowest cost. Age-banded pricing, limited portability, and benefit caps can make individual insurance more efficient over a longer horizon, particularly for life and disability coverage. On the other hand, simplified underwriting through work can be a real advantage if you have health conditions that would raise individual premiums.
Understand the Tax Treatment
Some voluntary benefits are paid with pre-tax dollars and others after tax, and that choice affects how benefits are taxed if you file a claim. Disability coverage is the clearest example. Small details like this can change the real value of a policy.
Know Your Enrollment Windows
Most elections happen once a year during open enrollment. Outside that window, you can usually change coverage only during a special enrollment period triggered by a qualifying life event, such as marriage, the birth of a child, or a loss of other coverage. Missing the window can mean waiting a full year or facing stricter underwriting.
Think About Your Career Timeline
If you expect to retire or change employers in the next few years, ask what happens to each policy when you leave. Coverage that ends with employment may leave you uninsured at an age when new coverage costs more. For those approaching retirement, this question connects directly to Medicare planning and how you will handle healthcare costs after your employer plan ends.
One common mistake runs in both directions. Some employees decline everything to protect take-home pay, while others enroll in every option without checking for overlap. A short review against your financial plan usually lands somewhere more sensible.
Choosing Voluntary Benefits to Offer: A Guide for Employers
Business owners face the same questions from the other side of the desk. Adding voluntary benefits can strengthen a benefits program at little direct cost to the company, since employees pay the premiums. That is one of the clear advantages for small businesses competing with larger employers for talent. Still, more benefit offerings do not automatically mean more value.
The most effective programs reflect the actual workforce. A younger team may lean toward pet insurance, child care support, and student loan resources, while a more experienced group may care most about disability coverage, critical illness protection, and retirement readiness. Short employee surveys before offering employees new options can prevent a menu nobody uses.
Education tends to separate programs that get used from those that sit on a menu. Clear explanations, simple benefits administration, and year-round communication give employees access to the information they need, so choices are made thoughtfully rather than rushed during a two-week window.
Owners and executives should also look at their own position. Group disability caps, limited life coverage, and concentrated compensation can leave significant exposure for higher earners. Those decisions belong alongside retirement plan strategy, tax planning, and succession planning, since each affects the others.
Frequently Asked Questions
What are the most common voluntary benefits examples?
Common voluntary benefits examples include supplemental life and disability insurance, critical illness and accident insurance, hospital indemnity coverage, dental and vision plans, legal services, identity theft protection, and pet insurance. Many employers also offer employee assistance programs.
Are voluntary benefits tax deductible?
It depends on the benefit and how it is paid. Some premiums can be paid pre-tax through an employer’s cafeteria plan, which lowers taxable income, while others are paid after tax. Employers can generally deduct their benefit contributions. A tax professional can confirm your situation.
Are voluntary benefits worth paying for?
They can be, when a policy fills a gap your core coverage and savings leave open. The value depends on your health insurance, emergency reserves, family needs, and whether comparable individual coverage costs less.
Can I keep my voluntary coverage if I leave my job?
Some policies are portable, meaning you can continue coverage directly with the carrier after an employee leaves, sometimes at different rates. Others end with employment. Review each policy’s portability terms before relying on it long term.
How do voluntary benefits fit into retirement planning?
Coverage like disability and life insurance protects your ability to keep saving. As retirement approaches, it also helps to know which policies end with employment so you can plan for healthcare costs and Medicare enrollment.
Putting Your Plan Into Action
The best voluntary benefits examples have one thing in common. They solve a specific problem in your financial life at a fair cost, and they keep working as your circumstances change. Reviewing your benefits once a year, with your full plan in view, tends to produce better decisions than reacting to whatever the enrollment portal highlights.
At RIA Advisors, we help individuals, families, and business owners connect benefits decisions to the bigger picture, including retirement income, tax efficiency, insurance planning, and estate planning. As fiduciaries, our guidance is built around your interests.
Connect with an advisor to review your benefits package and see how your voluntary benefits fit within a comprehensive financial plan.