Important Facts

Life Insurance After Unemployment

You might face challenges getting a life insurance policy while being unemployed. Find out the factors that can improve your chances of policy issuance if you're out of work.

Life Insurance Guidance: Can You Qualify for Life Insurance If You’re Unemployed?

Qualifying for life insurance depends on many factors. As the life insurance company reviews your application they consider many things, including your overall health, family health history, and occupation. They might also consider your financial situation. And since unemployment affects your finances, you may experience a postponement or even a possible decline of your application. However, every life insurance company follows their own individual underwriting guidelines, so unemployment doesn’t always create a barrier to getting the life insurance you need.

The following life insurance guidance will help you understand the possible reasons why you might face challenges in getting a life insurance policy if you’re unemployed, and ways that you can improve your odds.

Why would you be denied life insurance because you’re unemployed?

Anyone who has applied for a life insurance policy knows that the application and qualification process requires several step before a policy is issued. The application, administrative costs, underwriting processes, medical exams and tests, are all expenses that the insurer absorbs upfront – before receiving a dime of premium. Because of these incurred costs, the insurance company would like to know with some degree of certainty that you’ll not only have the ability to pay your monthly premiums, but that the policy isn’t going to lapse after only collecting a few months’ worth of premiums.

Getting life insurance if you’re unemployed

Being unemployed doesn’t necessarily mean you’ll be declined for a life insurance policy. Nearly all life insurance companies understand the importance of everyone having the life insurance they need to protect the people they love, and don’t automatically dismiss your application based on your employment status. However, there are many situations and factors that can improve your chances of policy issuance in the event you are unemployed.

  • The amount of insurance.

    Try applying for a smaller life insurance policy until you’re back on your feet. Having a less expensive policy to cover specific expenses such as funeral costs might be easier to qualify for.

  • The type of insurance.

    Try applying for a term, simple term, final expense insurance or accident life insurance policy. These policies often require little underwriting and can be very affordable. And because they’re quick to issue, they can also work in your favor.

  • Length of unemployment.

    A short period of unemployment with very tangible prospects of working in the very near future is considered positive. Be sure to discuss with your agent all the possibilities of employment that you may have.

  • Reveal all your assets.

    Being a homeowner or having other substantial assets makes you less of a risk for nonpayment issues and/or a policy lapse by demonstrating your financial responsibility.

There will be many situations where being unemployed may make it difficult to get a life insurance policy. Fortunately, there are also ways to demonstrate to your agent or life insurance company that you’re a responsible individual with the ability to meet monthly premium obligations.

The most important thing to remember is not to let your circumstances prevent you from applying for life insurance coverage – whether it’s unemployment or even heath issues. Many quality insurance companies want to work with you, helping you find the plan that’ll work best for your individual situation.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

Life Insurance Advice

Don't let a period of unemployment prevent you from getting the life insurance you need. You may experience challenges, but with a little background information, you can help your insurance agent or life insurance company understand your unique situation so that you can find the life insurance you need. This article can give you the life insurance advice you need to understand the potential challenges you may face and to better overcome them. For more information, visit our learning center.

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