What Happens to Your Life insurance When You Leave a Job? | Bankrate

Group life insurance is typically a subsidized life insurance policy offered through your employer. It can be a great deal, but when you leave your job, you’ll usually be forced to leave that life insurance policy behind.

However, there are certain ways to avoid losing your life insurance policy. In this article, we describe whether you must get insurance through your employer and what happens to your life insurance when you leave your job.

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what happens to life insurance when you leave a job?

In short, you lose your group life insurance when you leave your job. however, the long answer is more complicated. When these types of policies are offered as employment benefits, the policy itself is held by the employer, and the designated group of people who may be insured under the policy are the employees. this arrangement means that the only people who are eligible for that group plan are people currently employed by the entity that purchased the policy. As a result, employees who leave that employer are no longer eligible for that group plan.

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however, there are some workarounds. Changing jobs is an increasingly common part of the American economy, and insurance companies have made some efforts to adapt.

what should you do with your life insurance when you change jobs?

When you change jobs, you can ask hr if you can take your policy with you. if not, you can cancel your policy or let it lapse. here’s what you need to know.

  • You can cancel the policy or just let it lapse: Group life insurance typically ends about a month after you leave your job, so in effect it automatically cancels . Ideally, to avoid a lapse in insurance between jobs, it’s generally best to plan for the transition from a previous job to a new one by arranging for the employee’s life insurance coverage to take effect when the previous one is cancelled.
  • You can check if the policy is portable: In most cases, employer group life insurance is non-portable, which means the coverage won’t go with you when change jobs. however, if you can transfer your group policy to an individual term life policy, the rates will likely be higher than your original premium.
  • You can convert your group policy to an individual policy: You can also convert your group life insurance coverage to an individual whole life policy if you leave your job. but this option will also come with a higher rate because conversion premiums tend to be higher than premiums for group policies.
  • Should you get life insurance through your job?

    Getting life insurance through work has some pros and cons. here are some pros and cons to consider in your decision.

    frequently asked questions

    what is the best life insurance company?

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    The best life insurance company will vary for everyone. To find the best option for you, it may help to speak with an insurance agent and discuss your coverage needs. once you decide on a policy, you may want to get online quotes from several life insurance providers.

    what other options are there besides group life insurance?

    There are many life insurance options available to you and it may be helpful to discuss them with a licensed insurance agent. An individual policy can offer more affordable rates and a broader range of policy options, such as accelerated death benefits and disability waivers. Comparing competitive life insurance quotes among the best life insurance companies can help you find the best coverage for you.

    does everyone need life insurance?

    Whether or not you need life insurance depends on your individual financial goals. Many people use life insurance to make sure their loved ones, often young children or a spouse, are taken care of after they pass away. however, if you’re single and don’t want to leave money to your family, charity, church, or your business, life insurance may not be for you.

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