Life Insurance

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Life Insurance Coverage After a Layoff

When you are layed off, life insurance coverage that you received from your employer ceases upon your last day of employment. Although not all employers furnish their employees with life insurance, very often many employers offer 1x or 2x an employee's salary in life insurance benefits. Hence, when you are terminated from your company, the onus is on you to maintain continuous coverage, and procure life insurance on your own. Continuity of life insurance benefits is not guaranteed through the COBRA laws, which are discussed on the Heatlh Insurance page of this website.

Who Should Obtain Life Insurance ?

After a layoff, who should go out and obtain life insurance ? If you are a single person, and you have no debt or none of your debt is co-signed, it probably does not make sense to spend the money and obtain life insurance, unless there is someone you might potentially want to take care of financially, upon your demise. However, if you are single, and someone else would be responsible for your debt should you die (possibly, due to a co-signed loan), then you should absolutely obtain a life insurance policy.

If you are married and/or have a family, then it is absolutely imperative that you obtain life insurance on your own. Life insurance is necessary, in this case, to protect the welfare of your family, should something happen to you and you die.

How much Life Insurance Should I Buy ?

If you are targeted as a person who should obtain a life insurance policy (see section above), then the amount you obtain should minimally cover any existing debt that you have (namely, your mortgage, car loan balances, and any other loans that you may have). Over and above debt coverage, you should probably try and obtain an additional several hundred thousand dollars worth of coverage. For the typical family man, who has a mortgage, this would probably mean obtaining a life insurance policy in the range of $ 500,000 to $ 1,000,000.

Types of Life Insurance to Consider

Basically, there are two types of life insurance policy types to consider: whole life and term life insurance policies. We are not going to into any great detail here, describing these types of life insurance.

Whole Life Insurance

In short, whole life policies are significantly more costly to pay for, but you accrue equity in these policies, over the life of the policy. At any time, you can cash out of the value accrued in these policies. In that sense, whole life policies are a type of investment vehicle. We do not recommend these types of policies, due to their high premium costs. Your premium is determined by the amount of your policy, your age and your health (usually a combination of weight and other medical readings).

Term Life Insurance

Term life insurance policies provide the best bang for the buck. You pay a much cheaper premium for the coverage (as opposed to whole life insurance policies), but you do not accrue any sort of equity in the policy over time. Hence, after a year completes in the term, you have no ability to cash out on any equity (because you have none). Term life insurance policies allow you to obtain the best bang for the buck - lots of coverage, for cheap annual premiums. Similar to whole life policies, your premium is determined by amount of coverage, age, and the determination of your health. We strongly recommend that you obtain a Term Life Insurance policy, rather than a Whole Life Insurance policy. It is the most cost effective type of policy.

Life Insurance Vendors

If you have determined that you are going to procure a life insurance policy, it is important to get the best possible coverage, for the lowest possible cost. The following vendors provide these features, and allow you to obtain a free online quote:


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