What to do if losing your job means losing life insurance

The coronavirus pandemic continues to disrupt the U.S. economy as businesses both big and small cut back, close and declare bankruptcy. Consequently, a reported 16.3 million Americans were unemployed in July compared to just over 6 million the previous year, according to the Bureau of Labor Statistics.

In addition to losing their paychecks, many Americans also have lost their workplace benefits like life insurance, which can offer peace of mind in the event of an unexpected death.

If you find yourself without coverage due to unemployment, you may be wondering what your options are. The terms of your current or most recent policy, as well as your health, long-term financial plan and employment status, all play a part in deciding what to do next.

CONSIDER YOUR INSURANCE NEEDS

Start by asking yourself why you want to continue or replace your coverage. In general, life insurance is only necessary if your death would place a financial burden on others.

If you are the high-income earner or sole earner for a young family, you should assess your situation with a financial planner to make sure your family is protected during your unemployment, says Scott Holeman, media relations director at the Insurance Information Institute.

MetLife is offering to reinstate coverage without evidence of insurability if an employee is rehired within six months. Therefore, ask your human resources department about reactivation options if you anticipate returning to the same company and do not need coverage during your absence.

Additionally, if your spouse has a policy and you are concerned about shared dependents, Holeman says you may want to consider increasing their coverage to help offset the loss of your policy.

ACT QUICKLY

“If you are newly unemployed and you want to continue (having)...