A job insurance policy is a type of insurance coverage that provides financial aid to the policyholder and his family. The policy is useful in case the main source of family income happens to lose the job. To cover the uncertainty of losing a job, this insurance is one of the best solutions.
In this policy, the insured is eligible to get compensation upon losing the job during the policy term. Provided the loss of the job is due to the pre-determined reasons as mentioned in the policy wordings.
In India, job-loss insurance cover can be availed as a rider benefit. The insured can enhance the coverage benefits with a loss of job cover due to a critical illness or an accident. Some insurance products such as personal accident cover, critical illness cover, etc., have an income loss add-on provision linked to them.
Sometimes, the coverage is also provided for big-ticket personal loans. It means that these insurance plans protect from specific liabilities like home loan EMI cover for a few months. For anyone worried about getting laid off by the company, a job insurance plan can help in dealing with the situation.
Loss of Job Insurance or Income Insurance offers the following key benefits: to the policyholder:
Job insurance policies have certain eligibility criteria and some of them are given below:
As mentioned earlier loss of Job is an optional insurance coverage that can be availed by salaried / Self Employed individuals. The insured can avail of coverage benefits in case of employment termination/lay off/ retrenchment/dismissal. The inclusions under the job loss insurance policy for which the insured can file a claim are given below:
Critical Illness Diagnosis: The policy offers financial cover in case the insured is diagnosed with a specified critical illness. It is provided if the illness is covered under the policy. If it’s diagnosed during the policy term, the insurance company will offer compensation for loss of income during that period.
Disabilities: Income cover is provided for personal accident death and disabilities. It also includes permanent total disabilities resulting from an accident during the policy term. Provided the claim is permissible and payable under the policy.
Loans- The insurer can pay for your Loan EMIs for a specific tenure. And during that time the policyholder should also search for a new job.
A job insurance policy does not offer coverage under the following situations. These are the exclusions. for which most of the insurers do not accept a claim:
In case the policyholder loses his/her job due to an admissible reason, he/she intimates the insurer about the same. The insurer inspects the claim and upon satisfaction, the insured amount is paid to the policyholder. And the procedure to lodge a loss of job insurance claim is given below:
To avail the claim benefits, proof of termination is a must. The insurance company will require written proof of retrenchment from the claimant. The job-loss insurance is provided only if the termination is not voluntary. And has taken place due to the conditions mentioned in the policy.
Therefore, documentation mentioning the circumstances and reasons for termination is a pre-requisite. The policyholder would need to furnish the following documents when filing a claim for loss of Job Insurance:
There is no separate process to renew the policy. However, you can get it recovered once you renew the main policy in force. And if you do not have a loss of job cover, then you can opt for it at the time of policy renewal.
No insurance provides offers a stand-alone income loss or job-loss insurance plan. You can only buy it as an add-on cover. You can cover the larger risks associate with a life-threatening illness or an accident. The job-loss cover is provided in home insurance, personal accident cover and critical illness policies.
To ensure your eligibility to avail of job insurance claim benefits, written proof of retrenchment is essential. The insurer will only compensate once it established that the job loss is due to the reasons mentioned in the policy wordings. And not because of the policyholder’s voluntary resignation. For this reason, proper documentation citing the reasons is crucial.
No, the policyholder cannot claim job loss insurance benefits while he is on a probation period with his employer.
No, loss of job insurance benefits are only available to the salaried individuals, and not to the self-employed people.
Yes, loss of job insurance benefits can be availed for self-employed people. In scearios were there is a loss/Damage to workplace due to fire and allied peril or Inability to access workplace (due to Act of God peril)
Yes, you can get compensation for loss of income resulting after the loss of job due to an accidental disability.