COBRA Life Insurance Calculator (2026): Should You Continue Your Group Coverage?

You lost your job — and your group life insurance. Almost everyone knows COBRA lets you keep your health coverage. Almost nobody realizes the same law lets you keep your group life insurance for up to 18 months, and that quietly saying “no” to it can be one of the most expensive decisions you make if anyone depends on your income. This calculator prices all four of your exits — COBRA continuation, portability, conversion, and a fresh individual term policy — including the hidden imputed-income tax that keeps running while you continue employer-paid coverage.

What actually happens to your group life insurance when you leave

Group life insurance is a contract between your employer and an insurance carrier. When your employment ends, your eligibility under that contract ends with it — but federal law gives you a narrow window to keep the coverage alive. Four different mechanisms apply, and they run on different clocks, at different prices, with different rules:

• COBRA continuation. If the employer had 20 or more employees, the Consolidated Omnibus Budget Reconciliation Act lets qualified beneficiaries continue group health coverage — and group life insurance if the plan provides it — for up to 18 months after a qualifying event, or 29 months if you were disabled at the time of termination. The plan can charge up to 102% of the full premium.
• Portability. Many group term policies include a portability rider that lets you keep a stripped-down version of the group term coverage after employment ends, priced from a published age-banded schedule. No medical exam is required, but the rates climb steeply with age.
• Conversion. Virtually every group policy carries a conversion right: exchange the group coverage for an individual policy from the same carrier with no evidence of insurability. It is usually permanent whole life at guaranteed-issue prices — expensive per dollar, but available to people who could not buy anything else.
• A fresh individual policy. If your health is unchanged, a medically underwritten 20-year level term policy is almost always the cheapest path by a wide margin. This is the benchmark every other option should be judged against.

The trap is that these windows overlap and expire at different times. Miss the COBRA election and you may still have conversion rights. Miss those too, and the coverage is gone forever. Our calculator prices all four paths so you can see what continuity actually costs before the deadlines decide for you.

How the COBRA life insurance calculator works

The calculator models your four exits using published rate structures:

1. COBRA continuation is priced from IRS Table I — the same optional cost table employers use to compute the taxable cost of group life coverage — multiplied by 1.02, the maximum premium COBRA permits, plus whatever employee share you were already paying.
2. Portability uses a typical carrier age-band schedule per $1,000 of coverage.
3. Conversion uses a typical guaranteed-issue whole-life schedule per $1,000 — the structure real carrier conversion certificates follow, though your actual certificate controls.
4. Individual term is priced from the site’s market-anchored 20-year level term table, adjusted for your sex, health class, and tobacco use.

The verdict compares the COBRA monthly cost to the individual term premium. Below roughly 1.05× term, COBRA is genuinely cheap. Between 1.05× and 1.6×, it is a defensible short bridge. Beyond 1.6×, it only makes sense if medical underwriting would rate or decline you — and beyond 2.5× it is rarely rational for anyone who can pass an exam.

The hidden tax most people miss: imputed income continues on COBRA

Here is the detail that surprises even HR professionals. Under IRC Section 79, employer-paid group life coverage up to $50,000 is tax-free to the employee. Coverage above $50,000 creates “imputed income” — taxable value equal to the IRS Table I cost of the excess. While you are employed, you may see a small PS-584 entry on your paystub each December.

When you continue the coverage through COBRA, the imputed income does not stop — it accelerates. The tax-free treatment applies to employer-provided coverage, and while on COBRA you are paying most of the premium, so the entire Table I cost of coverage above $50,000 becomes taxable to you, on top of the 102% premium you are already sending in. On $200,000 of coverage at age 45, that is about $28.50 a month of taxable income — roughly $75 a year of extra federal tax at a 22% bracket — plus the $29.07 premium. The calculator prices both.

2026 COBRA group life costs: the four paths compared

This table is generated from the same engine that powers the calculator above, at a $200,000 coverage level, Standard health class, male non-tobacco, with the individual policy priced as 20-year level term:

Age	COBRA (102%)	Portability	Conversion	Individual 20-yr term
30	$12.24	$22.00	$280.00	$11.17
40	$30.60	$44.00	$490.00	$15.31
50	$53.04	$90.00	$860.00	$31.27
60	$102.00	$180.00	$1,480.00	$82.73
70	$393.72	$350.00	$2,480.00	$161.27

Read the age-70 row carefully: COBRA at $393.72 per month looks bad until you see conversion at $2,480. At older ages, group continuation is often the cheapest guaranteed path — the opposite of the pattern at 30. That inversion is exactly why the decision has to be priced, not guessed.

Sample scenarios: how the verdict changes with your profile

Profile	COBRA $/mo	Portability	Conversion	Term 20-yr	COBRA ÷ Term
32F, $150K, Preferred	$9.18	$16.50	$210.00	$5.85	1.57×
48M smoker, $300K, Standard	$58.14	$93.00	$960.00	$106.43	0.55×
58F, $250K, Substandard	$94.35	$160.00	$1,425.00	$100.96	0.93×

The smoker and the rated applicant both find COBRA cheaper than individual underwriting — tobacco and health penalties push real-world term pricing up to multiples that group continuation never applies. The healthy 32-year-old, meanwhile, pays 57% over the individual alternative for the privilege of keeping a group policy. Same law, opposite answers.

IRS Table I and your COBRA premium

Table I is the monthly cost-per-$1,000 schedule the IRS publishes under Section 1.61-21 for valuing group life coverage. COBRA administrators use it (or the plan’s actual rate) to compute your continuation premium; employers use the same table for imputed income. The 0-to-1.93 jump across the age bands is why continuation premiums double at 50, 60, and 70:

Age band	Table I $/mo per $1,000	Imputed income $/mo ($150K excess)	Extra tax $/yr (22%)
25–34	$0.06	$9.00	$23.76
35–39	$0.10	$15.00	$39.60
40–44	$0.15	$22.50	$59.40
45–49	$0.19	$28.50	$75.24
50–54	$0.26	$39.00	$102.96
55–59	$0.37	$55.50	$146.52
60–64	$0.50	$75.00	$198.00
65–69	$0.83	$124.50	$328.68
70+	$1.93	$289.50	$764.28

The deadlines that decide everything

1. Coverage terminates at the end of the month your employment ends (check your plan — some end on the last day worked).
2. COBRA election: at least 60 days from the later of the coverage loss or the election notice. Coverage, if elected, is retroactive to the loss date.
3. First COBRA payment: at least 45 days after electing. Miss it and the election is void.
4. Subsequent payments: due by the date stated in the plan, with a minimum 30-day grace period.
5. Portability election: typically 31 to 90 days after termination, per the certificate.
6. Conversion election: usually 31 days after the group coverage ends — including after COBRA finally expires, which is why conversion is the safety net for every earlier missed deadline.

Calendar all of them the week you leave. The single most expensive mistake is assuming “COBRA” only meant health insurance and letting the life coverage lapse while you shopped around — then discovering a new diagnosis during the gap has made individual coverage unaffordable.

Who should actually continue group life insurance on COBRA

• Newly diagnosed or undergoing treatment. If a fresh medical condition would make individual underwriting impossible, 18 months of continuation preserves coverage while treatment stabilizes — and conversion afterward guarantees you never leave the insurance system empty-handed.
• Older workers near retirement. At 60+, COBRA’s Table I pricing can undercut both portability and anything individually underwritten, and the 18 months bridge to Medicare-era planning.
• Smokers and rated risks whose realistic individual pricing (2–3× standard) exceeds the 102% group continuation premium.
• Anyone in a gap between jobs who already applied for an individual policy and is waiting for underwriting to complete. Continuation is cheap insurance against dying while your application is pending.

And who should decline it: younger, healthy applicants whose 20-year term quotes price far below the continuation premium. Take the medical exam, buy the individual policy, and let the group coverage go.

What to ask HR before your last day

1. Does our group life plan participate in COBRA continuation for the life coverage, and for how many months?
2. What is the exact monthly continuation premium — and is it 102% of the full (employee + employer) cost?
3. Does the policy have a portability option, and what is the current age-band schedule?
4. What is the conversion window and the carrier’s current conversion product and rates?
5. Will I receive the COBRA election notice automatically, or must I request it?

Watch: what happens to your life insurance when you leave your job

Key takeaways

• COBRA covers group life insurance, not just health — 18 months standard, 29 with a disability extension, at up to 102% of full premium.
• IRC Section 79 imputed income keeps running (and grows) while you continue employer-paid coverage above $50,000.
• Continuation pricing follows IRS Table I age bands — cheap at 30, brutal at 70, yet still cheaper than conversion at older ages.
• Healthy applicants can usually replace the group policy with individual 20-year term for less; smokers and rated risks often cannot.
• Conversion (no medical exam) is the safety net after COBRA ends — expensive, but it guarantees you never leave the insurance system empty-handed.

Frequently Asked Questions

Does COBRA apply to group life insurance or only health insurance?

COBRA applies to group health plans, and it also applies to group life insurance if the employer’s plan has 20 or more employees. Most workers never hear this because the notices they receive discuss only medical coverage. The life-insurance continuation typically lasts 18 months (36 for disability and certain other second qualifying events under the plan terms), costs up to 102 percent of the full premium, and is governed by the same election and payment rules as health COBRA.

How much does it cost to continue group life insurance under COBRA?

By law the plan may charge up to 102 percent of the full cost of coverage — the employee share plus the employer share plus 2 percent for administration. On a typical employer-paid policy that means you begin paying the entire premium yourself. Our calculator shows this against portability, conversion, and a fresh individual term policy at your age and health class.

Do I still pay tax on employer group life insurance while on COBRA?

Yes — and this is the most misunderstood part of the entire topic. The employer-paid portion of your group life premium remains tax-free under IRC Section 79 only for the first $50,000 of coverage; the excess above $50,000 has always been taxable imputed income, and on COBRA you pay tax on the full Table I cost of the excess. Continuing $200,000 of coverage at age 45 quietly adds about $342 a year of imputed income on top of the premium itself, which is why the calculator prices both the premium and the tax.

Is COBRA life insurance cheaper than buying my own term policy?

Usually the opposite. Group continuation rates follow the IRS Table I age bands, which roughly double at ages 50, 60, and 70. A healthy 45-year-old paying $28.50 a month to continue $200,000 under COBRA could buy a 20-year level term policy for under $20. A 30-year-old, though, may genuinely find COBRA the cheaper bridge for a year or two. The calculator prices your exact case — and if you have serious health conditions, the guaranteed conversion option may beat anything you could buy individually.

What happens if I miss the COBRA election or payment deadline?

You lose the continuation right entirely — coverage terminates at the end of the month your employment ended. You then fall back on the conversion right (typically 31 days from termination) and, for portability, the plan’s own election window. Missing a COBRA premium payment beyond the plan’s grace period (at least 30 days after the due date) also terminates the coverage retroactively. Calendar the deadlines the week you leave: election is generally at least 60 days, initial payment at least 45 days after electing.

Can I convert my group life insurance to an individual policy instead of using COBRA?

Yes, and conversion requires no evidence of insurability — that is its entire value. The trade-off is price: conversion policies are usually permanent (whole life) at guaranteed-issue rates that can run 10 to 20 times a healthy applicant’s term premium. The rational sequence for most people is to use COBRA or conversion as a short bridge while a medically underwritten term policy is applied for; the calculator’s premium comparison shows exactly how much the bridge costs per month.

How does the calculator decide whether COBRA continuation is worth it?

The calculator compares four exits from your group policy side by side: COBRA continuation at 102 percent of premium with 18-month (or 29-month disability) duration, portability at the age-banded schedule, conversion at a typical guaranteed-issue schedule, and a fresh 20-year individual term policy priced at your age, sex, health class, and tobacco status. It also computes the hidden IRC Section 79 imputed-income tax that continues during COBRA, and returns a verdict: COBRA is rational below roughly 1.05× the individual term cost, defensible to about 1.6×, and expensive beyond that unless health blocks underwriting.

Related resources

• Group Life Insurance Conversion Calculator — portability vs conversion priced at the age-band schedules
• Group Term Life Imputed Income Calculator — Section 79 taxation while you are employed
• Layoff Life Insurance Calculator — the day-one coverage cliff and your emergency-fund runway
• DIME Life Insurance Calculator — how much coverage your household actually needs
• Cost of Waiting Calculator — what every month of delay adds to a new policy
• External authorities: DOL COBRA FAQs · IRS Publication 525 (imputed income) · NAIC consumer resources

Get your free quote comparison

Continuing group coverage on COBRA is sometimes the right call — and sometimes it is the most expensive life insurance you will ever buy. Compare free quotes from top-rated carriers before you elect, and let the numbers make the decision. Get your free life insurance quote →

Assumptions and sources: COBRA premiums modeled at 102% of full plan cost per 26 U.S.C. § 4980B and DOL guidance; continuation pricing uses IRS Table I (Treas. Reg. § 1.61-21) as a proxy for plan rates — your plan’s actual rate schedule controls; portability and conversion schedules are typical carrier structures, not quotes; individual term pricing uses the site’s market-anchored rate table for Standard/Preferred classes. This tool is educational and is not tax or legal advice.