If your loved ones depend on you, life insurance coverage can make sure they are taken care of, after you are no longer able to provide for them financially. But what if you don’t currently have a steady income? What if you are unemployed? You might be wondering if you can still purchase a life insurance plan. There are several factors a life insurance company will consider even if you are not employed.
How long have you been unemployed?
If it is clear that your unemployment is a temporary condition – if you’ve been laid off, for instance – then there is a pretty good chance you’ve got nothing to worry about. Insurers will see that you’ve maintained a steady history of employment, and if you make it clear that you plan on getting back out in the job market, most carriers will approve your application.
Unfortunately, if you are in an industry that is clearly on the decline and lay-offs are abundant, you might have a harder time getting life insurance coverage. If keeping a steady job and earning enough to pay the premiums doesn’t look likely, your application will be less favorably considered by many life insurance companies.
Do you have assets?
You may be unemployed, but if you have other means of making money and have a substantial amount in savings, you will likely be approved, because companies will see that you are capable of paying the premiums.
To increase your chances of getting life insurance coverage while unemployed, consider the following tips:
- Show that you are willing and able. It is essential that you can show the insurance company that your unemployment is only temporary. Show them a copy of your resume and consider compiling a list of positions you are applying for in the near future. Or, perhaps you are unemployed because you are in the midst of starting your own business. In a Gallup study of 2,000 entrepreneurs and non-entrepreneurs, the overwhelming majority (83%) say that their main reason for launching a venture was a lifestyle choice or to increase their income.
- Demonstrate that you are financially stable. Show them proof of your financial stability, including bank account statements, investment accounts, and your credit report. If the insurance company understands that you are able to pay the premiums, they will be more willing to consider your application.
- Apply for a smaller amount. Life insurance policies can be purchased at just about any benefit increment, from as little as $10,000 to as high as several million dollars. The higher the benefit amount, the higher the premiums. Applying for a $500,000 policy will make the insurance company more concerned about your ability to pay than an application for a lower benefit amount.
Don’t be afraid to apply for life insurance, even if you are not in the perfect financial situation. Just make sure that when you do apply, you are fully prepared to advocate for yourself.
