Money

5 Steps to Follow If You've Been Laid Off

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Understanding what happens when you get laid off from work can help ease the pain of this difficult time and lessen the financial uncertainty that many people experience during this situation.

What's the difference between being laid off and fired, anyway? Being laid off means you're not responsible for losing your job. In contrast, if you're fired, you were seen as at-fault for whatever reason you lost your job. 

For example, a company that's downsizing may lay off numerous workers to accommodate a smaller budget. In that situation, the workers aren't seen as at-fault for the job loss. Generally, people have an easier time finding another job if they've been laid off rather than fired. 

Before thinking about your next venture, though, here are some immediate steps to take if you've been laid off.

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What to do when laid off

  1. Check for a severance package

If your employer offers you a severance package, it can make managing the following weeks much easier. Any amount of time without income can negatively impact your finances, but severance packages can help offset this by providing an initial boost of money.

  1. File for unemployment

As soon as you're able, consider filing for unemployment. While the application process is relatively fast, unemployment benefits can take a while to kick in.

  1. Create a job search plan

Don't wait to start searching for a new job. The sooner you replace your income, the less damage to your financial security you'll experience. If you haven't done so recently, update your resume and any accounts you have with online job searching websites. Consider what type of work you're qualified for and begin applying to jobs within that field that fit your needs and skills.

  1. Reevaluate your budget

A time of income loss is one of the most critical times to practice budgeting. Even if you already have a budget, it's wise to try and reduce your expenditures further during this time. When you don't know how long it'll be until your income picks up again, it makes sense to save as much as possible. Still, learning how to budget with no income is difficult, so don't be discouraged if it feels like an uphill climb.

  1. Check insurance options

If you received healthcare through your job, you'll have to consider alternatives or risk losing it. You can use the federal program COBRA to continue your current employer health insurance plan in some situations. However, you'll become responsible for your full premium payments. Alternatively, you can check the healthcare marketplace and see if a subsidized plan may not suit your needs better.\ \ You may also lose access to company-provided life insurance. A time of job transition can be a smart moment to lock in a rate on a 10, 20 or 30-year term policy. Learn how Ethos works to see how life insurance could benefit you.

When you get laid off, do you get paid?

Some companies will offer employees exit packages or severance pay when laying them off. Contact your company's HR department to see what, if any, severance packages they're offering. 

You can also file for employment if you've been laid off. 

But can I get life insurance if I'm unemployed? Yes, you can often find personal life insurance. In some cases, you may be able to convert the life insurance policy that you had with your employer.

Life insurance when you've been laid off

When income is threatened or disappears altogether, budgeting is tricky. In these times, it may be necessary to consider reducing coverage limits to save on premiums. Still, it's also possible to use insurance to help offset some of the more long-term financial uncertainty. 

If your budget has room, you can consider a life insurance policy to help ensure generational financial security. A term policy could provide a balance to debt or an inheritance for your children. In contrast, a permanent life policy can offer investment opportunities on top of the policy payout. Before purchasing a policy, it can help to review tips and tricks for buying life insurance.

Fortunately, there's affordable life insurance at any budget that can help create financial stability for you and your family, even during times of uncertainty. If you're interested in whole life or term policies, you can get a quote for life insurance online today with Ethos. Most applicants qualify for a no medical exam application process by answering a few health questions, and can receive coverage that day.

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