To mitigate any job loss chances, you might be lured to buy a Job loss insurance cover. But before buying it, let us know it all in detail.
The cover now extended by different insurers is not offered as a standalone product rather is clubbed with other products such as the Accidental Insurance or Critical Illness cover or Home Loan Protection plan.
What is the eligibility criterion for such insurance cover?
No specific eligibility as the benefit comes as a add on product and the claim is not provided in a case when the concerned or the insured is asked to leave the organization owing to poor performance or in a probation period. Also, a retrenchment proof has to be served for the claim to be processed.
In some of the products, it is being clubbed with an altogether different investment class such as the cse with ICICI Lombard Secure Mind product where the job loss cover is extended together with a SIP.
What claim is provided for and Is there any waiting period for making the claim?
Further, the claim provides for any EMIs that need to be paid off when the insured is between jobs and also it comes with a waiting period of 1-3 months.
Companies Offering Job Loss Cover
The need of the hour which led to the invention of this new offering is now on offer by several players in the industry including Royal Sundaram, HDFC Ergo, ICICI Lombard.
Illustration to show how does the job loss cover offers you the benefit
ICICI Lombard Secure Mind provides you the compensation with the SIP of ICICI direct for an added sum. In it the sum assured value equates to your pay out towards the SIP. And in case the SIP is invoked due to job loss, then the company offers you the cover equal to 2-3% of the sum assured on a monthly basis for maximum three months when you are not in job.
So the Indian scenario, when the add-on comes with so many limitation, is redundant and what one do in this dreadful time is be proactive to better manage a situation with contingency fund and invest in short term liquid funds to cope expenses under such circumstances.