Having a life insurance policy as part of your employer-sponsored benefits can be one way to get low-cost supplemental protection for the people who depend on you for financial support. But what if you lose your job or accept another position with a new employer? Will you be able to take your life insurance policy with you? Well, that depends.
Life insurance through the workplace is typically offered through a company's group life plan. While plans will differ, in many cases these benefits are offered to all employees with the employer paying part or all of 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.
So what are your options?
It's important to note that the type of policy you have with work will determine what you can do with your policy. Unless your plan provides you with additional options, in many cases you'll have only three choices: to cancel the policy, to port the policy to another group plan with your new employer (if your policy is with the same company), or to convert the policy to an individual life insurance policy. Speak to your human resources representative or benefits specialist to discuss your options.*
If you want to keep your policy and are unable to port your coverage, you may be able to convert your group policy to an individual policy - if your plan allows. However, because you'll no longer be on your company's plan, you'll be responsible for paying the entire premium out of pocket.
Generally, if you have no other options, your life insurance coverage will end when you leave your job. That means you'll need to apply for new coverage (either at your new job or independently from a life company or broker) based on your current age and health status. This may not seem to be a significant problem, but certain health conditions can make it difficult to find an affordable policy, or even make it impossible to qualify for coverage. For these reasons, it's often a good plan to carry additional life insurance independent of what you have through your employer. That way, the policy you have is yours no matter where you choose to work.
*Group life insurance benefits will vary between plans. Not all group life plans offer the option to port or convert life insurance coverage. Check with your HR department of benefits specialist to determine what options are available to you under your plan's contract.
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