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So, when you pack to leave from a job, something you might ignore is the insurance your boss gave you. But, understanding what happens to this insurance after ending employment can be crucial in ensuring your family’s safety. Alright, let’s proceed with the details.
Continuing Your Coverage
So, when you cease working for your boss, you usually have a choice to keep that insurance. You can usually keep it by transforming it into an private policy through something called a conversion benefit. But be warned, it’ll probably be more expensive and might not cover equivalent amount as you were getting with your previous employment.
Let me give you an example. Sarah, she recently left her employment after a decade. She had $500,000 in employer-provided insurance. Thanks to that conversion option, she was able to retain her coverage, but the monthly premiums increased significantly.
Moving Your Coverage
Transferring Your Insurance Coverage refers to the capacity to carry your life insurance policy with you if you change employment. Not all job-based insurance is transferable. You need to examine your policy to know what you can do.
Consider John, a software engineer, for example. He switched jobs a few years ago and his coverage followed him, no breaks in coverage.
Getting the Scoop on Premiums
Group insurance usually costs less than standalone individual insurance ’cause it’s a bulk rate. But if you lose your job, you might have to pay more for your insurance if you purchase a new policy individually. You need to consider the financial impact of this change.
A study by Life Insurance Marketing Association says a half-a-million insurance policy on your own costs approximately $45 per month, compared to just $20 if you’re part of a group.
Ask for Expert Help
You really should obtain professional counsel on your life insurance post-termination. A financial consultant can help you determine your alternatives and select the most suitable option for you.
Consider the case of Lisa, who talked to a financial consultant after she got laid off. The advisor helped her review various plans and select one that suits her requirements and her budget.
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