What You Don’t Know About Employer-Paid Life Insurance
You've lost your job, but you're not down and out. You study your finances, sign up with unemployment and hit the job boards. You know that nearly two thirds of those unemployed find new work in less than 14 weeks on average, according to the Bureau of Labor Statistics. You're on the ball, putting your energies into what's important - finding a new job and making ends meet in the meantime.
But is it possible that you've overlooked something? Life insurance may not be your first thought, but, for anyone with family and assets to protect, its importance shouldn't be underestimated. If you've relied solely on your employer's group life insurance up to this point, then it may be critical for you to find a new policy to ensure there isn't a long lapse in coverage.
Read on for our advice on how to tackle buying life insurance during unemployment.
Being unemployed is certainly not an immediate disqualifier for a life insurance policy; however, it is one of many factors taken into consideration when you're applying for an individual policy. Applying for a life insurance policy requires an investment in you by the life insurance company, and because of that, if they believe you won't be able to make the payments on your policy, they may not want to continue your application. Don't be discouraged though. They are many things that you can do to make yourself more attractive as a policyholder. Let's take a look.
Don't wait too long.
If you've only been unemployed for a short period of time and you're prospects of employment are promising, you'll likely be viewed more favorably by a life insurance company. Promising employment prospects could include factors such as the fact that you are skilled or educated, or you earned a good income in your last job. Report your assets. Sharing all of your assets, including any homes or cars you own, could help you obtain a life insurance policy. These types of assets show your financial responsibility and likelihood to pay your premiums. You will be considered less of a risk to the life insurance company.
Request a policy with a shorter term or for a smaller amount of coverage.
A life insurance company may be more likely to work with you if you are looking for a more affordable policy based on your current unemployment. The term length or coverage amount of your policy can generally be reviewed and updated at a later date, so you likely won't be locked into a policy that doesn't suit you in the long term.
Consider a different type of insurance.
There are several types of insurance that involve less underwriting or red tape, and thus, can be granted in a much shorter time span. If you want a policy quickly that covered you just during your unemployment, consider accidental life or final expense insurance. These policies may better fit your short term needs.
As self-evident as it may seem, a good way to help keep your family protected during your unemployment is to pursue an individual life insurance policy while you still have a job. Once you secure a policy, as long as you pay your premiums, it will continue without interference for the length of the term you designate. Planning ahead can save you a lot of headache when life deals you an unexpected hand.
Your spouse should also be an important consideration in the life insurance discussion. If you are not able to secure life insurance for yourself during your period of unemployment, it's likely that your working spouse could. If they already have a policy, they can review and increase their coverage while you're out of work. While this doesn't offer full protection for your family, it is a good stopgap to help keep your family financially secure during hard times.
Losing a job is a difficult time, and just because you don't currently have a salary doesn't mean you no longer have a need to protect your assets or family. Life insurance during unemployment is possible. Get the process started now by trying our life insurance calculator tool or by requesting a quote online today.