Job Insurance

Job Insurance Overview:

Job security is one of the main features of a dream job. With the ups and down in the job market, you are always living in the fear of losing your precious job. There are more reasons than one, for losing your job, such as company takeover, closure of a department/division, company shutdown due to monetary loss, poor client network or even bankruptcy. When in doubt of losing your job, do not forget to grab a job loss insurance cover.

Job insurance cover is the latest in the insurance industry in India. However, it is not yet available independently and can be purchased only as an add-on with a critical illness cover or a home loan protection plan. A secured job is everyone’s requirement, however the IT industry seems to be the most in need. With lucrative pay packages and attractive jobs, the IT companies undergo numerous mergers, revamps and acquisitions. Retrenchment of staff mainly happens as the employees receive a huge salary and in the event of company running in losses, the salaries are harder to pay.

Features And Benefits Of Job Insurance:

Some of the important features and benefits of job insurance are:

  • Insurance Provider’s Benefit:

    Although not the sole purpose, job insurance is a product that also benefits insurance providers. The main reason for this is that the insurance provider does not check whether or not a job insurance is required by the applicant.

  • Job Loss Reason:

    The job insurance cover is based on the reason for job loss of the insured. In fact, it is one of the main deciding factors for getting a cover on job insurance.

  • Premium:

    You have the choice of selecting a job insurance cover based on the probability of job loss and the premium amount. Typically, the premium towards job insurance is the range of 3% to 5% of the total coverage, on top of the master policy’s premium.

  • Period of Cover:

    If the job insurance is a part of the home loan protection plan, the policy tenure is just five years. The insurance does not cover the entire period of the home loan tenure.

Job Insurance Covers:

Job insurance cover comes to rescue when you have a pending loan on your head and no job to source your repayment installment from. The insurance pays for your EMIs for a period of three months or so. Within this period, the policyholder should look for a new job.

Job Insurance Exclusions:

Despite being a reassurance, a job insurance provides very limited cover. Most companies offer 50% of the net income. The job insurance does not cover job loss in cases when the employee has been asked to leave due to poor performance, or in the probation period. The following are the cases when job insurance does not provide any coverage:

  • Self-employed or unemployed individual
  • Unemployment during 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

List Of Plans Providing Job Insurance:

Stand-alone job insurance is not prevalent in the insurance industry in India. It is available as an add-on or rider along with personal accident policies or critical illness plans. Some of the plans that are coupled with job insurance are:

  • Home Suraksha Plan by HDFC Ergo
  • Safe Loan Shield by Royal Sundaram
  • Secure Mind by ICICI Lombard

With the job market in the country being so fragile and volatile, job insurance could be a sensible option. Although job insurance serves as a temporary relief, it saves us from the mental trauma of job loss.

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