The day you resign, four things stop at once: your salary, your employer’s group health cover, its group life cover and your monthly EPF contribution. If you’re planning to leave a salaried job to start a business, the order you replace them in matters. Some are easy to arrange while you still have a payslip. They get much harder a year later, when your only income proof is a business that hasn’t filed its first return.
Start With A Runway Number, Not A Gut Feeling
Six months of expenses is the usual advice for salaried people. For a founder, 12 months of household expenses is a safer floor, kept apart from the money set aside for the business. Most new businesses take longer to pay their owner than planned.
Put a figure on it. If the household runs on ₹80,000 a month, that’s ₹9.6 lakh, before the health and term premiums you’ll now be paying yourself. Keep it in a savings account, fixed deposits or a liquid fund, somewhere you can reach within a week without selling at a bad moment.
Don’t Count EPF As Part Of That Runway
EPF rules changed in October 2025. After you leave a job, you can withdraw up to 75% of your balance, but the remaining 25% is only available after 12 months without employment. Earlier, the full amount could come out after two months. Whatever stays in the account keeps earning interest.
So EPF can’t be your first cushion, and it shouldn’t be. It’s retirement money, and every early withdrawal cuts into years of compounding. Leave it alone unless the only alternative is high-interest debt.
Check Your Gratuity Date Before You Pick A Resignation Date
Gratuity now falls under the Code on Social Security, 2020, in force since 21 November 2025. Permanent employees generally need five years of continuous service. Fixed-term employees qualify after one year.
The amount can be large enough to plan around. If the wages used for gratuity come to ₹60,000 a month, five years works out to roughly ₹1.73 lakh under the usual formula. If you’re a few months short of the mark, moving your last working day may be worth it. Ask HR how your company counts service before you fix a date.
Buy Personal Health Cover While The Group Policy Still Runs
Group cover ends on your last working day. A new personal policy comes with waiting periods, including up to three years for pre-existing conditions under IRDAI’s 2024 rules. Anything diagnosed in a gap between the two policies becomes pre-existing on the new one.
Buy the personal policy a couple of months before you resign, while the group plan still covers you. Ask HR whether the insurer allows migration from the group policy to an individual one, which can carry over some waiting-period credit. Group plans often cover parents as well, so check who else loses cover when you leave.
How Much Life Cover Will Your Family Need?
Group life cover usually pays a few times your salary and ends with the job. Your own cover should be sized from what your family would actually need.
Here’s a rough example. ₹80,000 of monthly expenses for 15 years comes to ₹1.44 crore. Add a ₹40 lakh home loan and ₹25 lakh for a child’s education, then subtract ₹15 lakh of existing savings. The need is about ₹1.94 crore, so ₹2 crore is a sensible round figure. It ignores inflation and investment returns, so treat it as a starting point.
Put your own figures into a term insurance calculator to see what that cover costs at your age, well before the resignation letter goes in.
Why Buy Term Cover Before You Resign?
Insurers cap cover at a multiple of the income you can prove. Salaried applicants usually show salary slips, Form 16 and bank statements. Self-employed applicants are often asked for two or more years of income tax returns, and a first-year business may show very little.
Say your payslip shows ₹25 lakh a year. ₹2 crore is eight times that, comfortably within what insurers usually allow. If your first business return shows ₹6 lakh, the same ₹2 crore is more than 33 times declared income, and many insurers will cap you far lower until the business has a track record. Premiums also rise with age, so waiting two years costs you on both counts.
Have your number ready? See which term plans fit it while your salary slips can still back it up.
Medical checks and underwriting can take a few weeks, so start well before your notice period ends.
Arrange Loans While Your Payslip Still Counts
Lenders are more comfortable with salaried borrowers. If you need a home loan, a car loan or a higher card limit, arrange it before you quit, since approvals often get harder in the first years of self-employment. Borrow only what your runway can carry if the business pays nothing for a year.
Clear expensive debt at the same time. A ₹5 lakh personal loan at 14% over three years has an EMI of about ₹17,100, which is money a slow month can’t spare.
Keep The Business And The Household Apart
Open a separate business account from day one. Pay yourself a fixed monthly amount, even a small one, and move it to the household account on the same date each month. Then the runway shows exactly how many months are left, and the business account shows whether the idea is working.
Agree with your family how long you’ll give the business before you reassess, and what number would trigger that conversation.
When It’s Worth Waiting A Few More Months
Hold your resignation if the runway covers fewer than six months, or if you’re the only earner and term cover isn’t in place yet. Wait too if a health issue is being investigated, since a personal policy is easier to get before a diagnosis than after one. The same goes if you’re within a few months of gratuity eligibility.
Your Countdown Before You Resign
Start three to six months out. Build the 12-month household runway and clear any high-interest debt, since both take time and both are easier on a salary.
Two to three months before you resign, buy personal health cover so it overlaps with the group policy. Apply for term cover in the same window, while your salary slips and Form 16 can still support the amount you need.
In the last month or two, close any loans you plan to take and confirm your gratuity eligibility date with HR. Use the final weeks to ask about migrating your group health cover to an individual policy, and open the business bank account.
Once you’ve left, leave EPF untouched and pay yourself the same fixed draw every month.
The business plan decides whether the idea works. This list decides whether your family is fine while you find out.
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