Leaving a job can affect more than your paycheck. It may also affect both your health insurance and your life insurance.
The important thing to remember is that these are two different types of coverage, and they may have different rules when your employment ends.
If your life insurance is provided through your employer, the Texas Department of Insurance says that coverage typically ends when you leave your job.
Depending on your employer's plan, you may have options such as portability or conversion, so it is important to check your plan documents and deadlines before your coverage ends.
When exactly does my employer-provided life insurance end?
Can I take the coverage with me?
Is there a portability or conversion option?
Is there a deadline to make that decision?
Will my premium or coverage amount change?
Do I have enough coverage outside of work?
This is where COBRA may come in.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. It is a federal law that may allow you and eligible family members to temporarily continue the same employer-sponsored health insurance after certain qualifying events.
COBRA is for health insurance — not life insurance.
You may qualify when you lose job-based health coverage because you:
Quit your job
Are laid off
Retire
Are terminated for a reason other than gross misconduct
Have your work hours reduced
Federal COBRA generally applies to employer group health plans with at least 20 employees.
For termination of employment or a reduction in work hours, COBRA generally allows eligible employees and their covered family members to continue health coverage for up to 18 months. Certain other qualifying events may allow longer periods.
You generally have 60 days to elect COBRA, measured from the later of when your job-based coverage ends or when you receive your COBRA election notice.
One major difference is cost: you will usually be responsible for paying the full health insurance premium yourselfrather than having your employer pay a portion.
Texas also has state continuation rules that may apply in some situations, including certain plans or employers where federal COBRA does not apply. Eligibility and continuation periods depend on the type of plan and the circumstances.
HEALTH INSURANCE
Ask about COBRA, Texas continuation, Marketplace coverage, or another employer plan.
LIFE INSURANCE
Find out when your group life coverage ends and whether you have portability or conversion options.
That little comparison box would be especially good visually on the page because it makes the distinction crystal clear.
Then I'd finish with:
A job transition is a good time to review the life insurance protection you already have and see whether losing workplace coverage could leave a gap.
Author Note: I can help you review your life insurance coverage. COBRA information is provided for general educational purposes regarding health insurance.
Sources: Texas Department of Insurance and U.S. Department of Labor.