Introduction
In today’s world, life is never certain. You might be working so hard for your company. Nonetheless, when the economy faces a slump or your company is under losses, your employer gives you a pink slip and takes you off the employment rolls.
A sudden job loss can be frustrating and can blow your mind away. This is especially true when you have so many bills to pay for you and your family. These expenses can include the term fees for your son or daughter who is studying in school or college, your home rent, your monthly grocery bills, your electricity or gas bills, and the list can go endless for you indeed.
On this parlance, for most of the employees, you would have your insurance plans too that are covered for you and your family members under a Group Insurance program. Therefore, you also get an underlying question- ‘What happens to your insurance when you get fired?’ Well, let us find out more detailed insights into the same. Helping you get started further:
Insurance during the period of your employment- Meaning and Conceptualization explained
Employers take insurance premiums under your name for Group Insurance policies. Here, one portion of the premium settlement is made by the employer while another portion of the premium payments are deducted from your salary payout month on month.
It can be a comprehensive medical policy wherein you can nominate yourself and include your immediate family members like your mom, dad, daughter, son, or even your spouse. You can avail of cashless hospitalization from leading hospital outlets once you produce bills in lieu of the same.
Some employers apply for term insurance policies in the names of their employees. Here, the life insurance policy holds good as long as you stay within the employment rolls of your company. And once you quit or you are terminated from the firm, the term insurance policy also ceases to exist and you cannot claim benefits in lieu of the same. Your employer can also take disability insurance or a dental scheme under your name.
Scenario-wise break up of what happens to your insurance policy once you get fired
Here is a scenario-wise breakdown of your insurance policy post you get fired or terminated from your employment offices out there. Let us have a detailed overview of the same:
Health Coverage
When you have health insurance coverage under your Employment scheme, the policy remains active as long as you are employed in the company.
On the contrary, the policy ceases to exist once you put down your papers and opt to resign from the firm. Or, you get a pink slip or get terminated from the company as such.
The policy ceases to exist on the last day of your employment with the firm or by the end of the month of your time of resignation. You may then no longer receive health-aided benefits that you or your family members were covered under the Group Health Insurance policy.
Dental and Vision Insurance
When your employer covers you under a dental cum vision insurance plan, your insurance ceases to exist on the last day of your employment with the firm.
Your insurance might be extended until the end of the month if your employer or HR of the firm permits the policy to continue until the end of the month. The plan is the same as in the case of a health coverage policy as stated above.
Life Insurance
Life insurance is more like a term life insurance your employer might take under your name and you can nominate your family members too for the same. You can enjoy the coverage benefits the term insurance provides to you and your family members for the number of years you remain employed with the firm as such.
On the contrary, the policy ceases to exit once you get terminated or you voluntarily apply for your resignation from said company. Just like health coverage, the life insurance policy ceases to exist on the last day of your employment with the firm. Or, until the end of the month once you resign from the company.
Other benefits or insurance aided riders
When your employer offers you dismemberment or accidental insurance or any other type of rider, the policy remains active as long as you remain employed in the organization.
On the contrary, you might not be able to avail these riders once you put down your papers or get terminated from the employment office as such. Here, you can avail of these benefits until the last day of employment at the office or until the end of the month post your resignation.
Tips to continue with employer-funded insurance policies even post your termination
Here are tips you can follow to continue with employer-funded insurance policies even post your termination. Helping you with a run-down of pointers connected with the same:
Contacting your HR/ Finance team
You can contact the HR team or the Finance department of your organization to enquire how the insurance policies work after your termination from a company.
You can also contact the insurance firm where you have been enrolled to make further inroads with respect to the same.
Conversion of company policy into an individual policy
You can contact a relationship manager or customer support teams of the insurance company where your employer has enrolled you. You can discuss how to convert your company-aided policy into an individual policy.
The premiums that were deducted from your paychecks might be lower while you were employed with said firm. This is because you might have the employer’s contribution as well, with respect to the premium remittance on life insurance or health coverage policies.
However, when you aim to convert it into an individual policy under your name, you may have to shell out a higher amount of premium money and you must discuss pricing slabs beforehand to continue with the same policy.
Reading the fine print of the policy assurance documents
To get a clearer picture of how your policy works post your termination, you must read the fine print of your policy assurance documents online or post getting a copy of your policy document from your company.
This way, you would have a better idea of how things work after your termination with a said company.
Getting updates about the COBRA coverage
COBRA refers to the Consolidated Omnibus Budget Reconciliation Act. This is an act that is primarily designed to allow individuals and their family members to avail of health plans or affordable marketplace plans under group insurance policies post a job loss or a sudden retrenchment.
You can contact your HR team on the first day of your joining an employment organization to get further updates on how things work. Under the Affordable Care Act, eligible employees get a special enrollment period of 60 days or above to get coverage under a group policy post a job loss or sudden retrenchment.
However, you may have to submit documents to allow yourself continuation of policy enrollment even post your termination and the specific requirements have to be complied with on the same.
The Bottom Line
Insurance policies signed under a Group Employer’s Act work differently from how individual policies work. You must read the offer documents carefully before investing in comprehensive life insurance or health coverage policies.
What are your thoughts on this? Do mention it in the comments below!
