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Can I Still Get Life Insurance if I’m Unemployed?

Published On Apr 28, 2021 1:13 PM By InsuranceDekho

Life insurance is a contract between two parties, where the insured pays the premium and the insurer offers the death benefit of the insured to his family. If the insured is unemployed, he will not be able to pay the premiums appropriately and there are chances for the insurance company to deny his policy application. But unemployed people can still get life insurance and the life insurance companies consider several factors, before issuing insurance for them. 

Factors affecting Life Insurance of the Unemployed

There are two types of insurance plans available such as term life insurance and whole life plans. Term life insurance is affordable and has less premium. Unemployed people can get this type of insurance easily. The insurance company will consider the following factors, before approving insurance for them. These factors are as follows:

1. Duration of Unemployment

People who have been unemployed for a shorter time duration, such as lay off will qualify for life insurance easily.  People with a steady history of employment and with plans of working again will get their application approved easily. If the person belongs to the industry that renders ample job opportunities, then their insurance application will be considered favorable for approval. 

2. Assets of the Insured

Insurance companies will access the financial situation of the insured before issuing them life insurance. This is to ensure if the insured has the source to pay the premiums at a steady rate. If an unemployed individual has a steady source of income and decent savings, then the company will approve their application instantly. 

3. Insurance for Stay at Home Parents

Insurance companies consider stay-at-home parents as working and approve their insurance. This is because the value of the stay at home parent who chooses to take care of children is tremendous, as they are indirectly supporting their working spouse. But while fixing the coverage amount of their insurance policy, the earning potential and coverage of the working partner will be considered. 

You May Also Like To Read:- Income Replacement Plans

How to Increase the Chances of Insurance Approval When Unemployed?

The following things can be performed, to improve the chances of the unemployed getting life insurance approval.

1. Shop Around Insurance Companies

Unemployed people should shop around the insurance companies to get their application approved, as not all of them will approve their request instantly. The best way is to shop for them online.

2. Prove the Capability to Pay Premiums

Insurance seekers should prove their capability to the insurance company that they will be able to pay the premiums even though they are unemployed. The bank savings, proof of little or no debts, and asset status could help in this case.

3. Apply for Lower Sum Insured

Unemployed people should seek policies that have a lower sum assured. More the insurance coverage will be the premiums paid and the insurer may be concerned about the credibility of the insured to pay the premiums. Applying for lower amounts will ease the approval process. 

Also Read

Advantages of Buying Life Insurance Plan at Early Age

Bottom Line

Having a life insurance policy is a valuable asset to offer financial protection to the beneficiaries of the insured. Thus, the unemployed can get approval for life insurance policies under some circumstances. People who are already enrolled in an insurance policy, should not surrender their existing one, as some whole life policies can pay for themselves with dividends or from cash values and bonuses. 

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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