12:14pm Thu May 25th
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Unemployment Insurance

Considering the economic downturn, and how many people have lost their jobs because of the crisis, it may be a good idea to purchase private unemployment insurance. Many people assume that their employer's insurance will benefit them, should they lose their job. However, most employers’ unemployment insurance will only pay benefits to those who are laid-off, and not those who are fired. Therefore, a private unemployment insurance policy may benefit you when your employer's policy would not.

It is necessary to review several policies before accepting an offer from an insurer, because some private policies will only cover those who are laid-off, and not those who are fired from their job. When making a claim under an unemployment insurance policy, it is likely that proof will need to be provided, regarding the reasons for your unemployment. Most insurers will not pay on a claim if the reason for unemployment is through fault of your own. There is some gray-area with the terms 'laid-off' and 'fired', and the legal issues surrounding them differ from state to state. Therefore, it is necessary to ascertain how the insurer views these terms, before commencement of the policy.

It is unlikely that you will find a policy to cover unemployment due to resigning from your job. This would pose a high financial risk to insurers and, therefore, be unprofitable and detrimental to their business. A good comprehensive unemployment insurance policy should cover you for being laid-off or fired from your job, through no fault of your own. This will give you some financial protection, should you unexpectedly lose your job.

When choosing an unemployment insurance policy it is important to review the weekly benefits, as well as the duration for which the insurer will pay you. Many insurers will combine other types of insurance with an unemployment policy, in order to cover you from loss of wages due to a variety of causes. However, a combined policy may be more expensive, and you should thoroughly analyze how much you can afford before accepting any offer of insurance.

Although unemployment insurance gives peace-of-mind, it may be beneficial for you to start a savings account, instead of, or as well as obtaining insurance. Depositing a set amount of money per month, in to an account specifically meant for helping you during times of unemployment, may be the best option. With a savings account, which you do not withdraw from at any time during periods of employment, you will know that no matter the reason for your unemployment, you can receive the benefits of your savings, with no restrictions. If you are financially able, setting up a savings account as well as obtaining private unemployment insurance, may give you the optimum financial security.

When reviewing all of the quotations you obtain, be sure to study the benefits and conditions of those benefits, in full. Compare the premium you will need to pay with how that money may benefit you in a savings account. Most importantly, do not accept an offer of insurance unless you fully understand the terms of the policy, and seek professional help with the explanation of terms, if necessary.



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