When you leave a job, you can usually keep the life insurance you had through the employer, but you must decide quickly because most group policies end on your last day of employment unless you convert it to an individual plan.
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How employer‑provided life insurance ends
Group term life coverage is tied to your status as an employee. Once you resign, are laid off, or retire, the policy terminates on your official last day unless the insurer offers a conversion option. The conversion clause, if available, lets you move the coverage to a personal policy without a medical exam, but you will pay higher premiums based on your age.
Factors to consider before converting
Evaluate the amount of coverage you have versus your current needs. Employer policies often provide one to two times your annual salary, which may be insufficient if your financial obligations have grown. Also compare the cost of converting—premium rates increase sharply after age 55 and can be substantially higher than the group rate you enjoyed while employed.
Alternatives to conversion
If the conversion cost is prohibitive, shop for new individual term or whole‑life policies. Independent carriers typically offer more flexible amounts and can be cheaper if you are in good health. Use online quote tools to compare rates, and consider a policy with a renewable term that lets you adjust coverage later.
When keeping coverage makes sense
Retaining the policy is worthwhile if you have a strong attachment to the existing benefit, especially if you are older and would face higher rates elsewhere. The conversion option also preserves any guaranteed renewability or accelerated death benefit features that may not be present in a new plan.
Steps to take after your last workday
- Check your benefits summary for a conversion deadline—typically 30 days after termination.
- Contact the insurance carrier to request conversion paperwork.
- Compare the quoted premium with quotes from at‑least three other insurers.
- Decide whether to convert, purchase a new policy, or rely on other assets for protection.
Quick comparison of options
| Option | Cost | Pros | Cons |
|---|---|---|---|
| Convert existing group policy | Higher than group rate, age‑based | No medical exam, same coverage amount | May be expensive, limited customization |
| Buy new individual term | Varies, often lower for healthy adults | Custom coverage, competitive rates | Requires medical underwriting |
| No coverage | None | Save premium money | Risk to dependents if something happens |