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Home » Job Insurance: How To Ensure You Have A Back-up Even If You Get Laid Off

Job Insurance: How To Ensure You Have A Back-up Even If You Get Laid Off

Job Insurance

Uncertainty seems to be the order of things in today’s business environment. Job security is one of the main features of a dream job. With an unstable global economy and shrinking corporate profits, every employer is searching for ways to trim costs and improve productivity. Job insurance coverage is the most recent in the insurance industry in India. However, it is not yet available independently and can be purchased solely as an add-on with a critical illness plan or a home loan safety program. Losing your job would definitely shake you up, to say the least. But with a little help from your insurance agent and an added job security insurance plan, losing your job is not such a bad thing after all.

In this world where information technology has become a vital ingredient for corporate success, you’re always living in fear of losing your job because of layoffs or even split promotions. It is an alarming possibility, and it can come from many different areas, including company takeover, closure of a department/division, company shut down due to monetary loss, poor client network, or even bankruptcy. So staying ahead on time and keeping yourself prepared for the worse, getting good job insurance yourself, should be a priority.

Note: Unfortunately, Job Insurance is not available independently and must be purchased as an add-on to a critical illness cover or a home loan protection plan.

What are the Features of Job Insurance?

If you’re about to go for job insurance, there are a couple of features and benefits of job insurance that you can look out for. You may have already heard about these from people who have a similar policy, but if not, here is an overview:

Proven to be Benefit for Providers

If you are an insurance provider, you want to sell job insurance policies to every applicant who’s applying for a job. However, there is no need to convince the applicant when it comes to job insurance, as the insured is self-motivated once he/she gets the job. Though there are a number of customers who may not be aware of the term and its benefits, if the company sells the policy, it is also beneficial to them.

Reason Matters

The job insurance cover is based on the reason for the job loss of the insured. In fact, it is one of the main deciding factors for getting a cover on job insurance. Job insurance comes in various versions depending on the premium amount and policy coverage.

Low Premium Amount

You can choose to purchase job insurance, which covers you against the risk of losing your job and the associated expenses. The premium for this type of insurance is typically 3% to 5% of the total coverage amounts, in addition to the premium for your master policy.

Limited Period of Cover

If the job insurance is part of the home loan protection plan, the policy is valid only for five years. The insurance does not cover the entire term of your loan.

What Scenarios are not Covered by Job Insurance

  • Job insurance does not cover job loss resulting from poor performance or if you are fired during the probationary period.

  • A self-employed or unemployed individual

  • Unemployment during the probation period

  • Unemployment in case of early retirement or voluntary resignation

  • Job loss in case of an already existing illness

  • Job losses such as suspension, retrenchment, termination for underperforming or fraud

Where to get a Job Insurance

In India, stand-alone job insurance is not widespread. It is available as an add-on or rider along with personal accident policies or critical illness plans. Some of the plans that come with job insurance are:

  • Home Suraksha Plan by HDFC Ergo

  • Safe Loan Shield by Royal Sundaram

  • Secure Mind by ICICI Lombard

FAQs

Job insurance ensures the financial safety of individuals in case of job loss due to any cause. For one reason or the other, job loss poses a risk to health, mental peace, and social standing. Job Insurance finds its essence when an individual finds himself without a source of income and requires money to pay off his home loans, loan installments, credit card dues, and medical expenses.

In some cases, it offers regular benefits to the policyholder when they are unemployed. It varies from policy to policy. For example, if you lose your job because you were injured in an accident, your insurance company may continue paying you a regular benefit for as long as you are disabled.

Yes, you can easily add a job insurance rider to your policy without having to take a pre-medical exam.

No, if you have lost your job due to poor performance or during probation, you won’t be eligible to get the Insurance cover.

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