Mar 6, 2024

Things You Should Know About Employer-Provided Life Insurance

stressed woman looking at life insurance policy

Are you the holder of a life insurance policy purchased via your employer, or the named beneficiary in an employer-provided life insurance policy? If you answered yes to either, here are some stuff you should know about how to protect your policy and make sure you get the payout you’re owed if the worst happens.

If you get fired, you still get to keep your policy. Without a new medical exam!

It’s the law. If you get terminated, even if due to sickness or terminal illness, you have the right to convert your policy from a group policy into an individual one. And here’s the important part: The insurance company cannot ask you to undergo a new medical examination or physical before granting you the new policy. It simply requires that you timely complete the necessary conversion forms and then pay the required premium to maintain your coverage.

This means that even if you’re suffering from a serious illness, even if that illness is what caused you to lose your job, you can keep your life insurance policy at the same exact terms. Without this, anyone suffering from an illness would likely be refused coverage and would lose their life insurance policy.

But you have to move quickly

In order to take advantage of this law, the policy has to be converted within 30 days following termination of your group insurance policy. If not, those policy terms may be lost forever.

This is something your employer should be telling you about and assisting you with. It is their legal responsibility to inform you about the 30-day deadline, and to give you detailed instructions on how to make the switch.

Lost the policy? It may not have been your fault

What happens if you didn’t convert the policy in time, and so it lapsed and was lost prior to death? The insurance company no longer has any legal responsibility to either cover you or issue payment of the death benefits, and the life insurance policy you’ve been paying for and relying on for financial protection is now void.

This happens far too often, and too often, it happens because the employer was negligent in their responsibility to inform and instruct. In those situations, the legal responsibility has now shifted: Away from the insurance company, and onto the former employer.

If your claim gets denied, hope is not lost

If the policyholder whose life insurance policy was allowed to lapse dies in a manner that would have triggered a payout had the policy not lapsed, the insurance company does not have to pay, and will not pay. This can be crushing to the family or other beneficiaries who were relying on that policy payout to keep afloat in an emergency.

But it’s far from over. That’s because the former employer can and should be held accountable for the full policy payout that wasn’t paid thanks to their negligence in failing to properly inform you of the need or the means to maintain your coverage Morgan & Morgan’s life insurance benefits attorneys have a long track of holding employers accountable for allowing crucial life insurance policies to lapse.

This includes a 2017 Pennsylvania case where our attorneys successfully recovered $750,000 from the employer, the equivalent of the full policy payout the beneficiaries would have received had the policy not lapsed due to their negligence.

You can fight for your rights without paying anything up front

Morgan & Morgan is a contingency-fee law firm, which means they won’t charge you anything to review and pursue your case. You only pay if your fight is successful.

Call them right away for a free case review. Your fight for justice and compensation can start today.