Group life insurance is a common benefit provided by employers to their workers. But unlike a private life insurance policy, your coverage is contingent on you remaining an employee. So when you stop working at that employer, what happens to your life insurance coverage?
There are multiple ways to keep your life insurance coverage from your employer once your employment ends, but it is important to choose the correct option. The possibilities might include conversion, continuation, or porting the coverage. Each of these will be specifically defined in your life insurance policy along with the procedure and conditions for exercising that option. Carefully consider each option available to determine what best fits your needs. An experienced employee benefits attorney can help you understand your life insurance policy if you have questions.
You Can Convert
Converting your coverage means changing it from a group policy to an individual one, usually without having to provide evidence of insurability. This means you get to keep the same level of life insurance coverage without having to provide medical information or prove that you are healthy. The trade-off is that the premiums for a converted policy can be very expensive. You might choose to convert your policy if you have a health condition that would prevent you from obtaining a private life insurance policy – for example, if you are fighting a life-threatening illness. The expensive premiums may be worth keeping the insurance coverage to provide for your family in the event of your death.
You can Port it
Some group life insurance policies offer you the option to port your coverage when you stop working for your employer. Porting usually requires that you certify that you are healthy, able to work, and/or have not had any major changes in your health recently. It is similar to converting a policy, but because you certify that you are in good health the premiums are lower. Portability is a good option for maintaining your life insurance coverage if you are healthy and meet any other requirements stated in your policy.
You Can Continue
Most group life insurance policies offer options to continue your coverage under certain circumstances. Continuation is usually temporary. You do not receive a new, individual life insurance policy. Instead, your coverage is continued under the group policy until you are no longer eligible for continuation. Many policies offer employees the right to continue their life insurance coverage for a period of time if they pay both the employee and employer portion of the premiums. This can be a good option if you only need to keep your life insurance coverage for a short period of time before you start a new position at a new employer and become eligible for coverage under that new employer’s group life insurance plan.
Choosing the right option for maintaining your life insurance coverage can be tricky and depends on your plan’s specific requirements. You can contact an experienced employee benefit attorney if you have questions. If you are a beneficiary who has had a life insurance claim denied, an attorney may be able to help you obtain the benefits. Contact us today to see if we can help! Please call Kantor & Kantor for a free consultation at 800-446-7529 or use our online contact form.