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  • Writer's picturejimmy ting

Don't bank on your employer group life insurance. What happens IF you get laid off due to COVID-19

Updated: Apr 9, 2020

In the wake of the pandemic, many have found themselves out of work.

The team at JCT insurance Agency want people to be aware of circumstances where they may need help as COVID-19 continues to affect our daily lives.

One thing that people don't realize is they may have a life insurance policy through their company, and now that they're no longer working, that life insurance plan might not be valid.

We do have life insurance plans for people to look at and pick up, and so that if in the event something like this ever happens again, they don't have to worry about losing that benefit.

The Biggest Potential Problem with Group Life Insurance

Now you Have it, Now you Don’t — A group policy typically disappears if you’re laid off or if you voluntarily leave the company. So, if that’s your only source of life insurance, you’re banking on the idealistic vision that you’ll be working for your employer for a long time. Unfortunately, real world data shows that’s not very likely.

While some group policies are portable, allowing you to take coverage with you by remaining a part of the group after you leave a company, with most you simply lose coverage. If you opt to continue coverage with the group policy, be warned—you might find yourself paying a rather hefty premium to the insurance company.

Some group life policies offer the option to convert them to individual policies. These are also generally quite expensive, but they offer the advantage of being guaranteed issue.

Should You Get Individual Coverage?

Having your own policy also allows you to lock in a lower monthly premium for a longer term. Life insurance is often cheaper when you’re younger and healthy. If you know you might leave  your job in a year or even 5 years, you’d have start all over again with life insurance, and you’d be older so likely have a higher rate.

Luckily, more coverage doesn’t have to cost an arm and a leg with individual term insurance. You can also enjoy the freedom of shopping around for the better rates and not be limited to the companies and options your employer wants to work with. Once you leave your job, you’ll get a much better deal by getting your own life insurance instead of continuing to pay full price for the low-coverage group life policy you had — if that’s even an option.

On the bright side, you can find much better coverage options and at an affordable price with an individual term life policy. With this option, you’ll have more control regarding what your coverage amount is, how much premiums are, and how long your term is.

For more information about Life Insurance call JCT Insurance Agency at (626)354-2000 or email

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