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Leaving a job is more than just a change in routine; it is a pivotal moment that impacts various aspects of your life, including your life insurance. Amidst the flurry of tasks associated with transitioning to a new chapter, it is crucial not to overlook your life insurance coverage status. At Kantor & Kantor, we recognize the importance of understanding how leaving your current employer impacts your life insurance and the peace of mind it provides for you and your loved ones.

As you leave your job, it is important to know that the life insurance policy provided by your employer does not follow you to your next job or into unemployment. Depending on the policy’s terms and the options your employer offers, you may be able to convert your group policy into an individual one, but this must usually be done within a certain time frame after leaving your job.

Understanding Employer-Sponsored Life Insurance Basics

Employers often include life insurance in their benefits packages. This constitutes a significant financial benefit, particularly for individuals with pre-existing health conditions who may be unable to secure life insurance individually. Here is a rundown of the primary types of employer-sponsored life insurance:

1. Term Life Insurance

Among the most prevalent, term policies offer coverage for a specific duration, typically aligning with the period of employment. Beneficiaries receive the death benefit if the insured passes away during this term. However, no benefit is disbursed if the term ends before the insured’s death.

2. Permanent Life Insurance

This category includes universal life insurance, though it is less frequently offered by employers. Unlike term insurance, permanent policies extend coverage throughout the insured’s lifetime, contingent upon consistent premium payments.

How Group Life Insurance Works

Group life insurance offers a clear advantage: no medical examination is required. This is particularly beneficial for individuals with health concerns or those who prefer to avoid doctor visits.

Group life insurance tends to have affordable premiums. This is because the risk is spread across the group, and insurers can offer lower rates for each member’s coverage. For individuals with average health, the absence of medical exams and the affordability of premiums are the primary advantages of opting for a group policy.

What Happens to Life Insurance When You Leave Your Job?

Upon leaving your employment, your employer is obligated to inform you about the termination of coverage. If the policy allows for portability or conversion, you must complete and submit an application directly to the insurance company within a specified period, usually ranging from one to two months. Following this, you will assume responsibility for paying premiums directly to the insurer.

In the event of a conversion application denial, persistence is key. The Employee Retirement Income Security Act of 1974 (ERISA) protects employees’ access to insurance, among other provisions. Typically, applicants facing denial have the opportunity for one administrative appeal, emphasizing the importance of thorough preparation. Seeking guidance from an ERISA lawyer at this stage can be particularly beneficial.

Need an ERISA lawyer to fight for you? Contact us today at 818-886-2525.

What Should You Do with Your Life Insurance When You Change Jobs?

When transitioning jobs, it is important to consider the fate of your insurance policy. Here are a few options you have.

1. Cancel or Let It Lapse

Group life insurance ends the month after you leave a job, with the countdown starting automatically on your last day of employment. While no notification to the insurance provider is necessary, securing new coverage before the old policy expires is wise, ensuring continuous protection. If you have alternative coverage in place or are in good health and can secure new coverage easily, letting the policy lapse may be a viable option.

2. Check Whether It is Portable

Most employer-provided group life insurance plans are not portable, meaning they do not move with you to a new job. Portable coverage allows you to maintain the same policy and coverage amount, typically at a higher premium rate, without needing conversion. This can be a convenient option for individuals who are satisfied with their current coverage and want to avoid the hassle of securing new insurance.

3. Convert to an Individual Policy

When opting to convert your group policy, ensure you do it within the designated time frame, typically within a month of departing your job. This decision significantly impacts your financial stability and your family’s future welfare. You can expect higher rates, as conversion premiums usually surpass those of group policies. Conversion typically allows you to lock in coverage at a premium rate, regardless of changes in your health or occupation. However, it is essential to note that conversion options and terms can vary significantly between policies and insurance providers. Hence, it is crucial to carefully review your policy documents and consult with an experienced life insurance attorney to understand your rights and options.

How We Can Help with Your Case

We understand the importance of protecting your interests during this transition period. If you have life insurance with your former employer and face challenges regarding your coverage, our experienced life insurance attorneys are here to help. Here is how we can help with your case:

Reviewing Your Policy

The first step in assessing your situation is carefully reviewing your life insurance policy with your former employer. Life insurance policies often contain detailed terms, conditions, and exclusions that may not be immediately clear to policyholders. Our attorneys will thoroughly examine the terms and conditions of your policy to understand the coverage you had while employed and any options available to you after leaving.

Ensuring Compliance

Insurance companies must act in good faith and handle claims fairly. Unfortunately, some insurers may wrongfully deny or delay valid claims. If you encounter difficulties in obtaining the life insurance benefits you are entitled to after leaving your employer, our legal team can advocate on your behalf to ensure that the insurance company fulfills its obligations.

Appealing Denied Claims

If your life insurance claim has been denied, it does not necessarily mean the end of the road. Many denials are based on technicalities or misunderstandings rather than legitimate reasons. Our attorneys have extensive experience in appealing denied claims and can develop a compelling case on your behalf to overturn the denial and secure the benefits you deserve.

Contact Our Life Insurance Attorneys Today

We understand that navigating life insurance coverage can be complex, especially during periods of job transition. We are people helping people, and we are here to provide you with the guidance and support you need to make informed decisions about your coverage.

We are ready to answer questions about converting your employer-sponsored policy, purchasing an individual policy, or exploring alternative coverage options. With our understanding of insurance law and commitment to client advocacy, we will work to protect your interests and ensure you have the coverage you need to protect your future.

Do not wait until it is too late to address your life insurance concerns. Contact Kantor & Kantor at 818-886-2525 to schedule a free consultation with one of our knowledgeable attorneys.