With a recession on the horizon, companies across the globe have started cost-cutting by laying off employees. Despite being the sole breadwinner of your family or an individual struggling to achieve their dream career goals, job loss may bring a lot of financial burdens. However, during this tough time period, a job-loss insurance policy comes as a saviour. It can keep you protected against the cyclone of financial contingencies that may happen while you are looking out for new job opportunities. Read on to find out more about job-loss insurance in India and how it is helpful if you get laid off.
What is Job-loss Insurance Policy?
Job loss insurance is a financial tool that safeguards the insurer and their loved ones if the earning member of the family loses their job. In India, an individual is eligible to claim for job loss in cases of medical conditions like critical illnesses and accidental permanent disability. Any person who wants security even when they are jobless can include a job-loss insurance policy as an add-on to their standard health insurance plan.
At present, the Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) is the only plan that provides standalone job loss insurance coverage. In addition to this, the government has also been involved in providing job-loss benefits under the Atal Beema Vyakti Kalyan Yojana to individuals who have been registered under the Atal Beema Employees State Insurance Corporation (ESIC).
Key Benefits of Job-loss Insurance Cover
Salaried-income individuals always look for a job with security. Though some people manage to continue in the long run, others may face layoffs. The job-loss insurance will act like your financial buddy during this tough time. Listed below are some of the advantages of job-loss insurance.
- You have a source of income if you lose your job because of a critical illness, or any other disability.
- Upto 3 months after a job loss, the insurance company will pay for the home loan and other liabilities of the insured.
- You need not undergo any pre-medical examination to buy the plan.
What Is Not Covered Under Job-loss Insurance Policy?
Listed below are some of the exclusions under the job-loss insurance policy.
- Job loss due to poor performance, fraud, or any other illegal activity.
- The Individual himself has resigned from the company.
- Contractual or part-time jobs are not covered.
- Job loss during the policy’s waiting period is 30-90days.
- If during the probationary phase, a job was lost.
The insurer must arrange valid proof of retrenchment to find out if you are eligible to claim job loss insurance coverage.
What You Should Check Before Buying a Job Loss Insurance Cover?
Claim rejections are a nightmare, so you can avoid them by asking the insurance company the following questions:
“Am I still eligible for the claim if an employer provides severance pay?” “Will I get a claim if an employer provides a termination notice period?” And lastly, “Do I get the claim if I have been laid off but don’t have any letter or document to prove it”?
You can inquire about them directly with your insurance company, or you can read the terms and conditions mentioned in the policy document to avoid any last-minute claim rejections.
What Documents Are Required To Claim Job Loss Insurance Cover?
Here’s the list of documents required to claim job loss insurance coverage.
- Duly filled and signed claim form
- Documents justifying the cause of job loss
- Termination letter issued by the employer
- Last 3-month salary slip
- Information of employer
- ID and age proof of insured
Conclusion
Undoubtedly, job loss is a period that may bring a lot of difficulties. Job loss insurance is a great financial tool that will give you a sense of security by providing coverage for medical illnesses and paying off loans and liabilities.