The Importance of Unemployment Insurance and Income Protection Cover
Having a job is not a guarantee of financial security at all times. Anything that results in loss of income could happen to any one of us. This could be due to sickness, injury or even job loss or lay off, both of which are more common in times of economic troubles. It is important for everyone in employment to get Unemployment Insurance and Income Protection Cover. It will cushion one from the impact of the job loss and will help in maintaining financial stability as one tries to reorganize and get a new source of income.
This package offers individuals a certain percentage of their income, depending on the insurance premium. This normally covers one year or is paid until one gets a job or whichever comes first. This package could be especially important for those not in permanent employment and for those who work under a contract. It comes in handy when a job is ended abruptly, when a contract is not renewed and also helps those whose get injured and are unable to continue in their jobs. This package is usually tax free.
An unemployment package is paid by employers for workers who are forced to leave work not out of choice. The employer pays weekly or monthly premiums towards this. Those who are in self- employment may also take up this policy. In cases where an employer is not required to pay for this package in terms of tax, one can get private unemployment packages from many providers. The benefits of this cannot be overstated, especially in these unstable economic times where no one is safe from the effects of inflation. Many also take up private unemployment packages to supplement the benefits offered by the state. This package does not cover cases where a worker chooses to quit their job voluntarily or for cases of temporary employment.
None the less, like all insurance policies, these two also have limits and exclusions. One should be aware of the terms of the policy in order to make a wise decision before committing to a cover. The common exceptions include:
● Not taking cover for a pre-existing condition like an injury or some chronic illness and conditions like AIDS.
● The unemployment period does not refer to jobs that are seasonal.
● Quitting employment out of choice without a good reason.
● The conditioned claimed is not supported by a community care giver.
● The client is aware of an imminent redundancy
● A self-employed individual has to obtain certification from the tax department to back the lack of trade on his part.
● Many other conditions can be imposed depending on specific insurance providers.
It is of utmost importance to obtain Unemployment Insurance and Income Protection Cover as they could turn out to be a lifesaver during tough times. Pick out a workable premium according to income. This is not limited to those in regular employment but also to those who are self-employed.
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