A VoIP home phone system allows you to use your Internet connection to make phones calls for lower monthly costs than traditional phone service.

A VoIP home phone system describes the use of residential VoIP service and VoIP-compatible equipment to make VoIP calls. A VoIP home phone system means making calls over the Internet with a VoIP service using telephones designed or converted for VoIP use. A VoIP-based system is the best home phone system to use to save money on phone bills.

VoIP phone service is delivered over your Internet connection so you will need compatible Internet hardware for everything to work smoothly.

Most residential VoIP service providers use an analog telephone adapter that attaches to your current phone to provide VoIP service. An analog telephone adapter (ATA) is a device that connects a traditional telephone to the Internet and converts voice to something that can be transmitted over an IP network.

The magicJack, the Vonage Box, and the NetTalk DUO are all ATAs that hook your phone to your computer, or your phone to a router. Using an ATA may be the best home phone system setup for if you don't want to replace your current phones.

VoIP service for the home is very affordable. Plans cost between $10 and $30 a month.

However, you can forego the ATA and buy IP phones (also called a VoIP phones), which are telephones developed specifically to transmit voice data over an IP network. IP phones have an Ethernet cable that plugs straight into the router or the wall. IP phones are more popular in business VoIP applications, but there are also residential models. The Grandstream GXP285 is a home office/small business model that runs $40 on Amazon.com. A home office may find the best home phone system setup uses a business IP phone instead of an ATA on a house phone.

Some home phone systems can also make calls with a laptop or desktop computer by using a softphone. VoIP softphones are software applications that can either be downloaded to your computer or operated through a web browser to make phone calls over the Internet connection. Softphone users may plug in an external headset with microphone, or use the computer's internal microphone and speakers for audio.

VoIP softphones add a degree of portability to home phone systems when used on a laptop because you can log in and make calls wherever there is an Internet connection.

VoIP service for the home is very affordable and monthly rates for plans are between $10 and $30. A few companies conduct promotional offers that drop the average monthly rate to under $10. Voipo and PhonePower offer annual flat rate plans with buy-one-get-one-free promotional offers that bring the average monthly cost down to roughly $5.

Calling plans are usually separated by domestic and international minutes and come in different packages:

• A plan with unlimited minutes throughout the US and Canada
• One or two plans with limited (or metered) minutes throughout US and Canada
• A plan with a large allotment of international minutes

Estimating the amount of minutes you need a month will help you find the home phone system calling plan for your needs. If you don't make a lot of calls, paying for an unlimited minutes is not necessary and you can save money by getting a plan with limited minutes.

Residential VoIP service plans usually come with a free second line. Calls can be made on the second line while the first line is in use, which may be beneficial for households with a family.

VoIP service supports all the same call features you get with your current home phone service and they are included in the monthly rate. Review the list of included features posted by the VoIP service provider so you know what they do and don't offer. Features that are generally available include:

• 411 directory assistance
• 3-way calling
• Auto forwarding
• Call block
• Call forward
• Call hold
• Caller ID
• Caller ID block
• Call return
• Call waiting (w/caller ID)
• Enhanced 911 services
• Speed dialing
• Voicemail