When you leave a job, what happens to your life insurance largely depends on the type of coverage you had and the terms of the policy. Typically, employer-provided life insurance is a group term life policy, meaning it’s tied to your employment. When you leave, you generally lose the coverage unless certain provisions allow you to take it with you.

Here are a few possibilities:

1. Loss of Coverage: In most cases, when you leave a job, your employer-sponsored life insurance coverage ends. Group life insurance is often provided as a benefit for active employees, so once you’re no longer with the company, your coverage ceases. It’s important to check your company’s policy, as there may be a grace period before the coverage completely expires.

2. Portability Option: Some life insurance policies have a portability option, which allows you to keep the coverage after leaving the company. Under this option, you can convert your group life insurance into an individual policy. However, there are a few caveats:

• The premium for the individual policy is usually higher than what you were paying while employed since group policies are typically more affordable due to the pooled risk of multiple employees.
• You may need to act quickly, as there is often a limited window of time (e.g., 30 to 60 days) after leaving the job to opt for portability.

3. Conversion to Permanent Life Insurance: Another option is converting your group life insurance into an individual permanent life insurance policy, such as whole life or universal life insurance. This option allows you to maintain life-long coverage, but the premiums can be significantly higher because permanent policies are more expensive than term life insurance. One advantage is that you typically won’t need to undergo a medical exam, which could be helpful if your health has declined.

4. Purchasing a New Policy: If your employer’s life insurance ends and you don’t opt for portability or conversion, you may need to purchase an entirely new life insurance policy on your own. This could be an opportunity to shop around for a policy that better fits your needs, whether it’s term or permanent life insurance. However, the cost will depend on factors like your age, health, and the amount of coverage you want.

5. What Happens to Supplemental Life Insurance? Many companies offer supplemental life insurance, which employees can purchase in addition to the basic group policy. If you opted for this, the supplemental coverage will also likely end when you leave the job unless you can convert it to an individual policy or port it.

6. Temporary Coverage under COBRA-like Provisions: Some companies may allow you to extend your group life insurance for a temporary period under COBRA (Consolidated Omnibus Budget Reconciliation Act) provisions, similar to how health insurance works. However, this option is rare for life insurance, and the coverage will only last for a limited time.

7. Considerations When Leaving Your Job:

• Review Your Options: Before leaving, ask your HR department about your life insurance options and what can be done to maintain coverage.
• Compare Costs: If you’re considering portability or conversion, compare the costs of keeping your group policy versus purchasing a new one. Often, individual term life insurance purchased outside the company may be cheaper than a converted permanent policy.
• Health and Age: If you’re older or have health issues, the cost of purchasing a new policy might be higher, making portability or conversion more attractive, despite the higher premiums.

In conclusion, leaving a job often means losing your employer-provided life insurance, but you may have options such as portability, conversion, or purchasing a new policy. It’s essential to act quickly to explore your options and ensure you maintain the coverage you need.