Life insurance when changing employer

Before you start working for a new employer, it's worth checking if any life insurance cover is tied to your current place of work. Employer-provided life insurance policies, often offered as part of a benefits package, are typically tied to your current employer. This means that when you leave that organisation, you'll usually lose the cover. You can find out more in this article about how life insurance works.

To learn more about your financial options, you could speak to a financial adviser. If you don't have a financial adviser, you can find one at unbiased.co.uk. Please be aware that you may need to pay for this advice.

Below are some important considerations and steps to take when changing employer.

Employer-provided life insurance

Employer-provided life insurance usually stops when you leave that employer. This type of policy is often termed ‘group life insurance’ or ‘death in service life insurance'. It only covers you while you're employed by them.

Potential cover gaps

When changing employment, there may be a gap in cover between leaving one organisation and starting with another. It's expected that your existing cover will stop on the last day of employment with your current employer, and the new cover won't start until your first day with the new employer. If the change takes place over a weekend, there'll likely be a short period where you have no cover in place. If you know you'll be changing employment, it's worth looking into your life insurance options ahead of time, including reviewing the life insurance benefits offered by your new employer, to make sure you understand the cover and terms.

Maintaining personal life insurance

To ensure you’re still covered even if you stop working, you could set up a personal life insurance policy.

Personal life insurance policies aren't tied to your employment. This means that you and your loved ones are protected for the term of the policy, no matter what your employment status.

Employer-provided life insurance policies may only offer cover equivalent to 3-4 times your salary, which may not be enough to support your needs. For this reason, you might want to consider a personal life insurance policy, which can offer several benefits:

• Many personal life insurance policies offer higher cover amounts than employer-provided policies. This could help you cover significant financial  obligations, such as a mortgage, children's education, or other debts.
• Unlike employer-provided life insurance, personal life insurance stays with you regardless of your place of employment. This means you wouldn't have to worry about losing your cover if you were to switch employers or leave the workforce.
• Personal life insurance policies can be tailored. You can choose the cover amount, policy type (such as term or whole of life insurance), and additional features like critical illness cover.

Personal life insurance can give you the peace of mind that regardless of whether you decide to change employer or face unemployment, should the worst happen to you, your loved ones should be financially supported.

Our Life insurance plan pays out a lump sum if you die or are diagnosed with a terminal illness that meets our policy definition and you’re not expected to live more than 12 months. There is no cash-in value at any time and once the sum has been paid out, the cover ends.

Life insurance offers financial protection in the event of the policyholder's death. It doesn't provide cover if you lose your job. If you have a life insurance policy, you may feel it's worth maintaining the cover, even during periods of unemployment, to continue providing financial protection for your loved ones. You may want to consider:

• Building and maintaining an emergency fund 
  This could provide additional financial security during a job loss, allowing you to continue paying life insurance premiums and other essential expenses.

• Exploring other types of insurance products 
  There are a range of insurance products and financial tools available that could offer protection during periods of unemployment, such as unemployment insurance.
  

Death in service benefits are provided by some employers. They usually offer a lump sum payment, often a multiple of your salary, to your beneficiaries if you die while working for the organisation.

While death in service benefits provide significant cover, they are dependent on your continued employment. Find out more about death in service benefits.

Personal life insurance policies, on the other hand, offer a usually higher amount of flexible cover and policy terms that aren't dependent on your employment status. It's worth considering what your current and future requirements may be, before making a decision.