Insurance to Pay Your Bills If You're Unemployed

Can You Insure Your Job?

Lots of people still worry about unemployment these days. They want to know if there is a good way to protect their families if they lose their jobs. Of course, many employees will qualify for state unemployment benefits. But these benefits are usually fairly small when compared to a worker's salary while they were employed. Is there a way to supplement unemployment benefits with extra unemployment insurance coverage?

Private Layoff Protection Plans

Several US and British companies actually sold supplemental unemployment insurance on the private market. I am not really familiar with how the UK products worked. In the US, people could choose to purchase actual cash benefits. Typically, the insured person had to qualify for state benefits in order to collect. There may also have been a waiting period, of a few months, from the time the policy was purchased until the layoff, in order to qualify for benefits.

Even though these products were actively marketed a few years ago, before the Great Recession struck, they seem pretty rare in the US market today. High unemployment rates probably did not help the insurers make enough profit to keep offering these products.

There are still some forms of supplemental unemployment plans though. One popular example is credit insurance that may be offered through credit card companies. These plans vary, but are usually just intended to cover payments on one particular loan or credit balance. Qualification rules may differ by company. In addition, this coverage may be fairly expensive. Some experts tell us that we would be better off putting the price of the premiums in a savings account each month to prepare for an emergency.

Some homeowners insurance companies actually offer riders that will cover some, or all of, the mortgage for qualified home owners. Since these are additional riders, there will be an additional premium charged for this coverage. If this is interesting to you, check with your own home insurance company or agent for more information.

Are You Prepared For A Job Loss?

Of course, the best way to insure yourself against a job loss is simply to reduce expenses, set aside savings, and reduce debt. It is also a good idea to try and keep your personal network active. Updating your skill set can also make it much easier to find another job quickly. Sometimes we do not always have time to do all of these things because we have no idea that our jobs are not secure. That is why income protection plans would probably be very popular if they were common and easy to access.