What Happens to Your Life Insurance Policy When You Leave a Job

Employer‑Provided Life Insurance After Employment Ends

When you quit a job, the group life insurance that was part of your benefits usually ends on your last day of employment, unless you take action to keep it.

Conversion Rights

Many plans include a conversion clause that lets you change the group policy to an individual one without a medical exam. This option must be exercised within a set window—often 30 to 60 days after termination. The premium will rise because the insurer now treats you as an individual rather than a group member.

Portability Through COBRA

If the plan is qualified under federal law, you may be eligible for COBRA continuation coverage. COBRA allows you to keep the exact same policy for up to 18 months, but you pay the full premium plus a 2% administrative fee, which can be substantially higher than the employee contribution you paid while employed.

What If No Conversion or COBRA Is Available?

Without conversion rights or COBRA eligibility, the coverage terminates on your last day of work. To avoid a gap, you should apply for a new individual life insurance policy promptly. Your health status at the time of application will affect rates, and any pre‑existing conditions may impact underwriting.

Key Considerations

• Check the summary plan description for conversion deadlines.
• Compare the cost of conversion versus buying a new policy.
• Assess whether you need the same coverage amount or can adjust it.
• Consider other benefits like accidental death riders that may not transfer.

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