Opt for A Job Loss Insurance Cover to Make Layoff Less Painful

Mr.Ravi, 30, was working in an MNC company as a sales charge for the past 4 years. He was very much satisfied with his job and was having a good salary package which was enough to meet all his requirements. But two days back, due to a huge loss, the company decided to cost-cutting through a layoff, which increased the risk of losing jobs for many of the employees including Mr. Ravi. This also increased the risk of not being able to repay loans and other mortgages taken by the employees. But Mr.Ravi wasn’t worried about such issues as he knew about these types of risks related to jobs and that’s why he bought a job loss insurance cover to protect himself from such layoffs.

With the increasing number of layoffs in India, job security is becoming a big issue and that’s why many people like Mr. Ravi are opting for a job loss insurance cover which provides cover for the policyholder in case he faces involuntary termination due to the closure of the company as whole or its divisional office, provided the firm employees at least 20 employees. The reason for the closure could be financial loss, merger, and acquisition, or violation of the law.

Cover Under Job Insurance

The Job Insurance cover comes into action when you have a pending loan and no job to repay it. In such cases, the insurer pays the 3 biggest EMIs where the loan eligibility is 50% of the monthly income. The loss of income is covered up to a certain limit in this plan which is decided in advance. Look, no one knows about uncertainty, and the one thing that is fixed is that uncertainty never leaves anyone. So, before you met with any uncertainties, you should make a way to exhaust the pressure of real life.

Everyone gets granted of home loan, just because it’s necessary for everyone and you build your home. The loan amount is payable on the basis of EMI, suppose, after building a home unfortunately you met an accident. The worst thing about your family is, you are the only breadwinner for the family. It means, now onwards things are getting worst for your family, so, if you want to avoid these situations you should opt for the job insurance policy. We do not know at which place in life, at what time we must have something, in such a situation, if we buy job insurance, then it is our only advantage.

Features and Benefits of Job insurance

Premium

Well, to be honest in this era, the most valuable thing is the job for everyone because it’s the only way to fulfill things around you. You can choose the job insurance cover on the basis of your chances of losing jobs and the premium amount. The premium amount in job insurance ranges from 3-5% of the total insurance cover, on top of the master policy’s premium.

Waiting Period

There is also an initial waiting period of 30-90 days before you can make any claim. Although the policy term ranges from 1-5 years, still you can make a claim only once during the term.

Reason for Job Loss

The cover of Job insurance is based on the reason for the job loss of the insured. It acts as one of the main deciding factors for getting a cover on job insurance.

Exclusions

The Job insurance doesn’t provide cover for the insured person in the following cases:-

• Unemployed or Self-employed individual
• Unemployment during the probation period
• Unemployment due to voluntary resignation and early retirement
• Unemployment in case of already existing illness
• Job loss due to suspension, retrenchment, termination for underperformance or fraud

Inclusion

Certain things might be not effective too much in the policy, but every single rider and benefit is played a vital role in the policy, and we should admire those riders and benefits that come with the plan. Some of the inclusion makes it a bit different from a normal policy to a policy with inclusion. Inclusion is the best thing that any policy offers you, but you should take a look at inclusion whether it is useful or not for you.

Critical Illness Diagnosis – Well, it’s not a new inclusion in policy, but yes it is new in a job insurance policy. If you are diagnosed with a critical illness, then the insurance company will offer compensation for loss of income during that period.

Disabilities – If you met with an accident, and you are now disabled then the insurance company will offer compensation for loss of income during that period. Like as, this policy is covering your EMI and all the stuff.

Loans – As we mentioned earlier, if you are covered with a job insurance policy then they’ll pay the EMI of your loan.

Companies Offering Job Insurance in India

Till now, stand-alone Job insurance is not available in the insurance sector in India, but it is available with personal accident plans and critical illness plans. For claiming benefit under loss of job, you need to submit some specific documents like a copy of the last three months’ salary slip, appointment letter, form 16, etc.

Some of the plans which offer job insurance as a rider in India are:-

• Secure Mind Plan by ICICI Lombard
• Home Suraksha Plus Plan by HDFC ERGO

With the increasing number of layoffs, especially in the IT sector, opting for Job insurance could prove to be a wise decision. But you should also understand that job insurance comes with various limitations and provides relief for only a certain period of time.