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How to Keep Life Insurance Coverage Between Jobs

August 29, 2019
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

Many companies provide life insurance for their employees as part of a benefits package. While plans will differ, in many cases these benefits are offered with the employer paying the policy’s premium. Therefore, if you were to leave your current job, you are no longer part of the company’s group plan and your former employer isn’t required to pay for your coverage.

In the U.S. the average worker changes jobs 12 times in their lifetime. So, what happens when you leave the job? How do you stay insured? We understand that having life insurance coverage is very important, especially if you have a family that depends on you.

Whether you’re involuntarily or voluntarily leaving a job, you have a few options:

  • Port your group term coverage to another group term policy
  • Convert the group life policy into an individual permanent policy
  • Buy a new individual life insurance policy

Porting Group Life Insurance Coverage

Note that not all group life insurance plans have a portability option. A portability option gives you a window of time to transfer, or “port”, your group term life insurance coverage to another group term life insurance policy.

Not all group life insurance products are the same, but the following are common factors:

  • You typically have 31 days after termination of employment to apply for this coverage.
  • You will need to fill out a medical questionnaire to qualify for preferred rates or to purchase more coverage than you originally had.
  • The rates increase as you age, typically every five years.
  • This portable coverage generally ends once you reach a certain age.
  • The coverage can terminate if the group policy for the entire group of people who elect portability terminates.

If you’re relatively healthy, you would likely save money by buying an individual term policy instead of the optional portable group coverage. The rates of group life insurance are set with the assumption that people who are unhealthy are going to purchase it. Therefore, the rates are higher on average compared to a healthy individual going through the normal term life insurance buying process.

» Compare: Term life insurance quotes

Converting a Group Life Insurance Policy

Another option would be to convert your group term life insurance policy into a permanent life insurance policy. This type of policy may be kept inforce for a person’s entire life and pays a benefit upon death.

Not all conversion permanent insurance products are the same, but the following are common factors:

  • You typically have 31 days after termination of employment to apply for this coverage.
  • Unlike the group term life insurance policy, premiums are fixed throughout the life of the policy.
  • Premiums for the converted permanent life policy are higher than premiums for term insurance.
  • The permanent life insurance policy accumulates cash value you can borrow against or surrender.

Not all employers offer the same benefits, but a group life insurance conversion option is more commonly provided than a portability option. Your employer will give you a Notice of Group Life Conversion Privilege upon termination. This will explain your options and the steps you need to take if you would like to keep coverage. Contact the human resources department if you have recently left a company and not yet received this. Both continued coverage options are only available for a short window of time.

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

Buying a New Individual Life Insurance Policy

The best way to ensure you keep life insurance coverage between jobs is to own a private/individual life insurance policy. An individual life insurance policy doesn’t terminate if you leave your job.

An individual life insurance policy’s rates are not set for a group. They are determined based on your individual health and lifestyle.

You can purchase individual term life insurance or individual permanent life insurance, whichever is best for your situation. Most individuals only need term life insurance. It’s very affordable and can fit into most budgets as well.

Buying an individual life insurance policy doesn’t mean you can’t get coverage from your employer. In fact, group life insurance is a great supplement to your own life insurance coverage. If you die, both policies pay the death benefits.

» Calculate: Life insurance needs calculator

If you’re looking to purchase an individual policy, Quotacy will be your advocate to make sure you get the best possible price on a policy that works for your particular situation. Because individual life insurance is priced based on your unique health and lifestyle factors, it’s important to work with a good broker that will shop your application to many insurance companies.

If you have any health issues, your Quotacy agent will reach out to our top-rated insurance companies to find out which one will treat your medical condition the most favorably. If you have just one or two risk factors, for example maybe you have a less-than-stellar driving history or you have a family history of heart disease, based on our experience we know upfront which company will be best for you. But if you have multiple risk factors, for example maybe you have high blood pressure, you’re overweight, and you smoke marijuana, then it’s best to do some shopping around. Quotacy makes this easy and does it for you.

Because Quotacy is independent, we’re not tied to any insurance company and work solely in your best interest. Your agent will guide you every step of the way through the buying process and will be your dedicated agent after purchase as well. Get your free term life insurance quotes today without giving up any contact information.


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