A secure job in hand is every person’s dream and with the current rush and market ups and downs, there are many who have to feel the pinch of losing their job. The reasons vary – company takeover by other entity, bankruptcy, closure of a division or unit in the particular location or company shut down due to financial losses and poor clientele. That is why people who have even the slightest hint of uncertainty about their job should apply for job loss insurance cover.
WHO SHOULD OPT FOR THIS?
As mentioned earlier, every person desires to have a stable job where he does not have to worry about tomorrow. However, we have seen in present times that IT industry, even though very lucrative and attracting, is equally unstable. There are mergers, acquisitions and revamping of the staff. Sometimes due to bad market and low profits, the companies have to retrench the staff. This is mainly because IT companies by far pay a hefty package to their employees and slow or no business mean incurring losses due to staff salaries.
Hence, people from IT industry need such jobless insurance cover the most. The insurance helps them take care of their loan EMIs at least for a period of 3 months till they find another job.
HOW DOES THIS PLAN HELP?
High income raises dreams and aspirations. Thus, many employed in high paying jobs take loans for vehicles, house, etc. All is fine when their bank account is ticking with income that cares of their EMIs. However, when the inflow stops suddenly due to job loss, then there is a question about how to manage daily expenses along with EMIs. This is like eating up your savings to a great extent.
This is where the insurance plan comes to aid. As mentioned earlier, the plan takes care of your installments till you find another stable job. The period may not be too prolonged, may be of 3 months or so. But still it gives a breather to plan future strategies of finance management.
TERMS AND CONDITIONS OF JOB LOSS INSURANCE INDIA:
Every insurance plan or scheme has its terms and conditions. Same applies to job loss insurance cover as well.
The insurance plan does not support claim if:
- Unemployment is due to voluntary retirement or resignation.
- Unemployment due to pink slip during probation. Only confirmed employees are covered.
- You are self-employed and are without work then insurance plan is not applicable.
- The termination of service is due to fraud committed or due to misconduct or the performance is not up to the mark.
- Due to previously known illness or existing disease, the employee is asked to leave the job.
UNDERSTANDING MEANING OF JOB LOSS INSURANCE:
“Job loss insurance coverage”, as the term suggests, is insurance scheme that takes care of your financial needs, albeit for a short while when you lose your job. The exclusions applicable to claim are mentioned above. However, besides those points one more thing needs to be noted, that is this plan has a stipulated period of aid. It can be decided upfront or is 3 months minimum. Needless to say that the policyholder should actively seek a new job within that time, else the benefits cease to exist. Overall, the term of the policy extends between 1 to 5 years. But the flip side is that you can make an only SINGLE claim within that period. There is no provision for multiple supports.
Presently in India, there are no companies that offer a stand-alone job loss insurance protection. It is always teamed up with something like critical illness coverage or personal accident policies. The premium is also more for these add-ons and varies between 5-10%. So come to think of it, for a short term benefit, you actually pay a lot more. These policies give temporary respite not long term ones, so if you have sufficient savings to see you through a lean period, then there is no need of this policy.
Some companies that offer this facility are –
Royal Sundaram’s Safe Loan Shield
ICICI Lombard’s Secure Mind
HDFC Ergo’s Home Suraksha Plus.
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