Do you know losing a job will affect your insurance? (image via fairfaxcounty on flickr)

Times are tough and the economic turmoil of recent years continues to claim jobs almost every day.  The loss of a job presents problems on several fronts, first and foremost, the loss of income.  For many people who become unemployed, this problem overwhelms any others and makes it difficult to see how losing a job impacts other areas of your life.  Unfortunately, not dealing with these other areas can lead to more problems down the road.  One of these areas is your insurance coverage.

The last thing you need when you lose your job is to add to your family’s financial burden by purchasing insurance policies.  However, if you are like most people, you have been getting at least some of your insurance coverage through your employer.  Some of this coverage, like health and disability coverage was provided by your employer.  Other types of coverage like life, auto, and even homeowner’s coverage were purchased through your employer.  When your job goes away, in almost all cases, so does this coverage.   You may find yourself without life insurance, auto coverage, or a homeowner’s policy which further endangers the financial future of your family.

Here are things you must consider in terms of your insurance policies when you lose your job.

Health Insurance

Most people will have the option of continuing employer offered health insurance through the COBRA program once their employment ends.  This can be a lifesaver for families where the primary insurance provider suffers a job loss.  However, be prepared to pay significantly more for the same coverage.  Shop around to see if you can find an individual policy that is more cost effective.

Life Insurance

If your life insurance was provided by or through your employer, you will need to find a new individual policy to meet your life insurance needs.  This should be a top priority in order to protect your family’s future.  Temporary loss of your income is challenging enough; don’t take the chance that the worst happens and your family must figure out how to move forward without you while also dealing with the permanent loss of your income.

Disability Insurance

Life insurance is important, but disability coverage is just as important, especially for those in their middle years with families.  People in this age group are actually more likely to become disabled than to die, according to the Social Security Administration. This means that protecting your family’s finances may mean you need to secure a disability insurance policy that is separate and distinct from your employment.

Auto and Home

Many employers offer group insurance coverage for auto and homeowner’s policies that enables their employees to purchase this coverage at a discount.  When your employment ends, these policies may remain in effect but the cost to keep them may increase because you are no longer part of the group.  There is also a chance that this coverage will no longer be available.  Make an appointment with your insurance agent to discuss these policies and make sure you have the coverage you need at the best possible price.

Losing a job is difficult enough; make sure you don’t compound the problem by failing to attend to your family’s insurance needs.

Related Articles:

http://www.iii.org/articles/life-stages/employment-change.html

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