Insurance Considerations For The Unemployed

If you’re without a job, you may wonder if you can access insurance coverage. The short answer to this question is yes. You can get insured for life, health, disasters, and other life’s inevitabilities even without a job. However, the amount you can buy depends on your insurance plan, provider, how long you’ve stayed without a job, reasons for unemployment, your marital status, and your spouse’s average net income, among other factors. In this article, we discuss life and health insurance for the unemployed and factors that influence your eligibility for life or health insurance coverage if you do not currently have a source of income. Before we proceed, always remember that lack of a job also does not affect your existing insurance policies, be it life, health, or any other coverage.

How You Can Get Health Insurance Without A Job

The most common and straightforward way to obtain health insurance is through your employer’s group insurance. However, this is not the only available option. Depending on your policy or insurance provider, if you’re currently without a job, you can still enroll in a family or individual health plan within two months under the Special Enrollment Period (SEP). Here’s what makes you eligible for SEP:

  • Having your marital status changed, for example, getting married
  • Adopting or having a baby
  • Becoming a legal US citizen
  • Moving to a different location that does not offer your current plan
  • If you lost your employer’s health insurance coverage

Once you’ve registered for SEP, you can begin shopping for health coverages for the unemployed or low-income earners on the exchange provided by your state or through a licensed agency like MyHST. It’s always advisable to go for a plan that complies with the Affordable Care Act (ACA) as this helps you access some subsidies. This often works best if you can’t afford to pay for your healthcare plan. Through the ARPA, there has been an increase in more subsidies making it easy for any American to qualify for more subsidies.

Health Coverage Options For The Unemployed

If you’re an unemployed American citizen, you may be able to get an affordable insurance plan through the insurance marketplace. The policy amount depends on your household income or personal savings. Alternatively, you can qualify for the free or low-cost options such as Medicaid and Medicare, and the Children’s Health Insurance Program (CHIP).

It is your overall household income that determines the health coverage you can qualify for, not your employment status. Visit the marketplace insurance plan and explore the many available low-cost options depending on your household and income size. If you’re unemployed and disabled, you can benefit from the federally provided Medicaid insurance option. Learn more about Medicaid and how you can apply for one.

Finally, you can make the most of the Children’s Health Insurance Program (CHIP), which covers children from families with a higher income above Medicaid insurance requirements but cannot afford private insurance. Learn more about CHIP at the insurance marketplace.

Factors That Makes You Eligible For Insurance Without Employment

Several factors can render you without an income and therefore eligible for certain insurance coverages. These factors include:

Temporary Unemployed 

One of the most accessible positions to obtain health or life coverage while not employed is if your unemployment is temporary or more recent. If you’re looking for life insurance, your insurance provider will most likely check with the department of labor, which highlights long-term unemployment as 27 weeks or longer. If you’re actively job hunting, the life insurance company will most likely underwrite your insurance amount based on your previous salary. Regardless of how long you’ve been unemployed, there are a few things you’ll need to prove that you’re likely to resume active employment and deserve the coverage. They include:

  • Updating your resume reflects your employment history and the probability of resuming work soon. The insurance company will need such proof to decide if you deserve the coverage amount
  • Writing a formal letter explaining why you’re unemployed and the possibility of you getting a new job soon.
  • Show proof of assets such as investment or savings accounts, property, or other liquid assets with real value. These will convince the insurer that you’re insurable and worth the underwrite.

You Can’t Find Work

You can still access life or health insurance if you’re not working and you’re not successful at getting gainful employment. While the process of obtaining insurance is not easy under such circumstances, you can still qualify for Medicare, Medicaid, and CHIP. For life insurance, you can be eligible for a smaller policy than if you were unemployed and looking for work. Your best option is to prove that you can provide immense value for your family. For example, you can prove that you can take care of your child or children despite being jobless. Fortunately, the government, through its USA.GOV platform, can help you find a job in the public or private sector. Federal jobs come with multiple benefits, including health and life insurance coverages through the Federal Employers Group Life Insurance Program.

You’re A Stay at Home Parent

Fortunately, the United States government recognizes parents who stay at home to look after children as full-time workers, meaning if you’re a stay-at-home parent, you’re actually doing a full-time job. And full-time childcare is not cheap in the United States. The value of work a stay-at-home parent provides is significant and valuable, and if you’re married and you die, it can affect your working spouse’s income-earning capabilities.

Typically, the insurance company must confirm if the working parent has insurance coverage, be it health, life, or similar coverage. The insurance provider would be willing to issue coverage on the unemployed parent based on the working parent’s current policy. This amount can be between 2-3 million dollars, but it largely depends on the company.

Even if you’re a stay-at-home parent who’s not married and has no salaried spouse or partner, you’re still providing value to your family by taking care of your child or children. Most health and life insurance companies recognize the contribution stay-at-home single parents make to take care of their families. If you were to die, the loss would affect your children’s lives.

However, the amount of insurance you can qualify for depends on your financial contributions to the family, the age of the children, how long they’ll rely on your care and if you have any liquid assets. You’ll only need to explain your situation to the insurance company. However, for federal health insurance, the process is much straightforward, and you can access Medicaid, Medicare, and CHIP without much hassle.

You’re A Stay At Home Spouse

If a spouse isn’t employed, they can qualify for insurance even with no children. According to the law, married couples have an insurable interest in each other. Ideally, the employed spouse must have some form of insurance coverage. The amount of coverage you can receive for life, health, or different types of insurance depends on the amount issued on your working spouse’s coverage. This amount is often capped. It is usually advisable to work with a knowledgeable insurance agent who will take you through the requirements process and help you overcome setbacks that might stand in the way.

You Are Retired or Wealthy

If you’re retired, or you’re financially stable enough such that you don’t need to work, you can still buy insurance coverage for life, health, or property. You may want to purchase life insurance, so you can pass your estate to your next of kin tax-free or to donate some of your property to charity, etc. Whole life insurance typically has a positive return rate since dividend payments are always guaranteed. If you’re retired or wealthy, the best insurance option is life or permanent insurance, which works best even if you are not actively working. Consider working with our Chartered Life Underwriter (CLU) agents, who will help you sign up for a  policy that will offer you the best value plus return for your money.

You are Living With Disability

If you’re living with a disability, you can quickly obtain federal health insurance. However, it can be a bit tricky to get life insurance because medical disability is often perceived to shorten an individual’s life expectancy. If it can be proven that your disability can shorten your lifespan, the insurance company may not be willing to issue a life insurance coverage, or they may give a more expensive policy. Your disability may be further compounded by the fact that you’re not employed. If your disability is permanent, it can be hard convincing an insurance company to see the monetary losses your family may suffer in case you die.

Of course, you can take advantage of premium riders or disability income riders. A premium rider can be waived if you become disabled. In contrast, a disability income rider will pay you a specific monthly income until you attain a particular age limit highlighted in the contract. For health coverage, Medicaid insurance coverage is your best option if you’re disabled. You need to work with a knowledgeable insurance agent who can help you navigate the complex insurance system to obtain life insurance if you’re disabled and unemployed.

Factors To Consider If You Need Insurance And You’re Unemployed

If you’re without a job and need insurance coverage, here are some essential factors to consider to help you obtain the right policy at a reasonable price.

Clearly explain to the insurer why you need that particular insurance coverage and the amount you can afford comfortably even if you’re unemployed. Always work with an agent to help you have a smooth process. The agent will advise you if you’re eligible to obtain coverage through your spouse’s benefits package, disability income waiver, etc.

Additionally, life insurance coverage is the best insurance option for unemployed people since it’s affordable. If you’re a wealthy person, a stay-at-home parent, or spouse, there are some exceptions for life insurance coverage, for example, whole life coverage.

These are some of the many factors and processes that a qualified insurance agent is best placed to explain to you. Being without a source of income doesn’t mean you don’t add value to life, nor does it make you ineligible for insurance coverage. Working with a licensed and knowledgeable agent will enable you to obtain the coverage you deserve so you can support your loved ones in their time of need.

You don’t have to surrender any existing policy you may have if you’re not employed. If you take a life policy, it should be able to pay for itself through cash value or dividends. Overall if you can afford to pay for your policy despite not being permanently employed, it can offer valuable long-term protection for your dependents. You can only surrender your coverage as a last resort and in exceptional circumstances.


If you’ve been laid off or encountered a shift in your employment, MyHST can help you find the best health, life, or education insurance plans available in your state. MyHST is a wholly-owned Allstate Insurance Company and the National General Insurance Group. Our licensed and knowledgeable agents are available in every state, ready to assist you in finding the ideal insurance plan that meets your needs and budget.