Life Insurance

Can You Get Life Insurance If You Are Unemployed?

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Most people rely on a steady paycheck to pay the bills and financially support their dependents. However, if you're unemployed, you could lose out on key benefits, such as employer-sponsored retirement plans and group health insurance. Fortunately, being unemployed shouldn't impact your ability to get a life insurance policy.

Will I be asked about my job status when I apply for life insurance?

When applying for a life insurance policy, the insurance company typically looks at a variety of personal factors to determine your eligibility. Many traditional life insurance providers require a comprehensive in-person medical exam. With Ethos, you'll only be asked a few basic health questions, and no exam is needed. 

Whether a medical exam is needed, insurance companies typically look at key information like your age, gender, any pre-existing health conditions, and if you're a smoker. However, you usually aren't required to disclose your employment status on a life insurance application for private coverage. So, if you're wondering whether an unemployed person can purchase life insurance, the answer is generally yes.

In most cases, you can't be disqualified from purchasing life insurance if you're unemployed. That's especially true if you're experiencing short-term unemployment or are between jobs. Similarly, students, caregivers, and stay-at-home parents who don't work shouldn't have trouble getting life insurance.

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When does unemployment impact my life insurance eligibility?

There are a handful of situations when your employment status could make it challenging to purchase a private life insurance policy. When you submit a life insurance application, the insurer may look at your credit history to better understand your financial situation. That helps them determine how much coverage you can afford.

If the insurance company notices that you have no current income, it could raise a red flag. That doesn't mean you'll automatically be disqualified, but it might limit the amount of coverage you get approved for.

Depending on the insurer's underwriting standards, a lack of steady employment income over a long period could potentially cause your application to get rejected. If that happens, explain your situation to the insurance company and see if they'll reconsider approving you.

I'm on disability leave from my job — can I still get life insurance?

Disability is one of the major causes of unemployment. Although being temporarily disabled is not an immediate disqualifier for life insurance, it could make it more difficult to get coverage. From an insurer's perspective, many disabilities are related to pre-existing conditions. That includes everything from heart disease and arthritis to autoimmune disorders and mental health conditions. 

Most carriers offer life insurance for unemployed individuals who are also disabled, but your condition could dictate the type and amount of coverage you want.

What happens to my life insurance after being laid off or fired?

Your employment status doesn't typically impact your ability to purchase a new private life insurance policy. However, it can be more complicated when it comes to group life insurance from a previous employer. Unlike individual life insurance policies, group life insurance policies cover all current employees as one entity. That's why employer-sponsored life insurance usually provides less coverage than individual policies. 

If you previously had life insurance through an employer and got laid off or fired, you would usually lose out on those benefits. Certain group policies are portable and allow you to continue coverage after your employment ends —but it's not commonplace. Also, keep in mind that group life insurance won't cover you during the unemployment period. If your employer eliminates your position, a group life insurance policy won't offer you protection while you're out of work. 

To secure your life insurance coverage while unemployed, you'll need to cancel your group life insurance benefits and purchase a private life insurance policy on your own.

Get a life insurance policy online with Ethos

Ethos makes it easy to purchase life insurance online without the hassle of taking a medical exam and waiting weeks to get approved. To get a quote, simply fill out the online application, answer a few health questions, and see your estimated rate. 

If you have any questions about your coverage options, we have agents standing by to help you choose the right policy type, term, and coverage amount for your specific needs. Ethos also offers a 30-day free look period if you decide you no longer need online life insurance coverage.

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