According to statistics, more than half of our compatriots have never heard of such a service as job loss insurance. Therefore, in recent years, many insurance companies have become actively involved in the promotion of this program, offering it to those who draw up a bank loan.
The main features of such programs
The object to which insurance against loss of work is directed is the loss of a permanent source of income. You can issue such a policy on your own initiative if there are preconditions for a reduction in the company's staff. In this situation, the payment will depend on the size of insurance premiums. Similar programs unite a fairly large group insurance claims. As a rule, they provide for not only the dismissal of the employee in connection with the liquidation of the enterprise, but also the loss of the insured's working capacity.
Pros and cons of similar programs
As mentioned above, you can issue such a policy on a voluntary basis, as well as upon receipt of any bank loans (from consumer to mortgage). The main advantage that insurance provides in case of loss of work can be considered that after your dismissal, the company is obliged to pay all expenses associated with making mandatory monthly payments on the loan you have taken. Depending on the terms of the contract, this can last for 6-12 months.
However, despite the obvious advantages, such programs have a number of significant drawbacks. It often happens that the dismissal of an employee does not give him the right to use insurance. Therefore, when drawing up the contract, it is necessary to carefully study all the conditions indicated in it. According to the rules established by any insurance company, payments are not made to persons dismissed of their own free will. And this must be taken into account when saying goodbye to the employer.
What documents are needed to apply for a policy?
Work loss insurance is issued on the basis of the application of the insured person. In addition, you will have to collect the necessary documentation package. It:
- domestic passport;
- certificate confirming the amount of monthly earnings for the last six months;
- photocopy of all labor pages.
Those who apply for job loss insurance (VTB also provides similar services) in connection with obtaining a bank loan must additionally provide a certificate of the amount of debt, a loan agreement and a loan repayment schedule. The list of required papers may vary depending on the chosen company.
Conditions under which payments are not made
Job loss insurance involves a number of cases in which the company has the full right to refuse payments. These situations include:
- receiving monthly unemployment benefits from the labor exchange;
- loss of working capacity due to illness or upon reaching retirement age;
- safety breach resulting in personal injury;
- intentional provocative actions that force the employer to decide to dismiss the insured;
- being in the workplace while intoxicated;
- voluntary departure from work.
Who will be refused insurance?
The list of persons not covered by job loss insurance is quite short and absolutely logical. First of all, they will not be able to issue a policy for those who, at the time of drawing up the contract, do not have a permanent place of work.Insurance is not applicable to persons who have worked for less than one year. As a rule, they are the first to fall under abbreviations. Also, insurance against loss of work cannot be issued to persons of pre-retirement age. This refers to cases when a person applying for a policy is left with no more than six months before going on a well-deserved rest.
In addition, such programs do not apply to military personnel and foreign citizens.
Payment mechanism
Typically, companies that take out job loss insurance prescribe in the contract a number of conditions on which payments are made. Usually, from the day of the occurrence of the insured event until the receipt of payments, at least two months pass. This approach eliminates the likely fraud. In addition, most insurance companies introduce a so-called waiting period, the essence of which is similar to a temporary deductible. Usually its duration is from two to three months. The waiting period allows to exclude the so-called short-term unemployment, which has almost no effect on the solvency of the insured.
Another major nuance of job loss insurance is that it is paid no more than one year. As a rule, this time is enough to find a new job. If a person lost his job due to disability, then payments are made at a completely different risk.
Payout amount
Loss insurance is based on the same principle as disability insurance. The amount of the monthly payment should not be higher than the normal monthly earnings of the insured person. In order to avoid subjective risks, the size of insurance payments in connection with the loss of a workplace should be no more than 80% of previous earnings.
Unfortunately, modern realities are such that it’s not difficult to get a piece of paper stating that you are unemployed, which means cheating the company. Therefore, insurance companies are trying in every way to protect themselves from possible fraud.
Is it really that simple?
In fact, everything is much more complicated than it might seem at first glance. Do not forget that most modern employers go to all sorts of tricks that allow them to avoid termination of the employment contract in connection with the liquidation of the enterprise or on the initiative of management. Indeed, in this case, the organization will have to pay the dismissed employee his average salary for three months. Therefore, many employers do not close crumbling enterprises, but simply begin to cut back on the size of their salaries, forcing people to leave at will. And in this case, the latter can not rely on an insured event.
In addition, a condition is stipulated in many insurance contracts according to which payments become possible only after the insured person registers at the labor exchange. And many people find visiting such an organization unacceptable and even humiliating.
Despite all the difficulties, the presence of an insurance policy in case of loss of a job allows you to provide a so-called airbag and at least somehow protect yourself from possible troubles.
