What is insurance for unemployment?

Insurance for unemployment is a policy that can be purchased by individuals to ensure that they have a regular income if they lose their job. The insurance payments act as a replacement income for if involuntary unemployment occurs.

It is down to an individual to take out the insurance with an insurance provider, some employers may suggest certain companies although this is not the case in all situations. There has been a rapid increase in the amount of people taking out such polices as job security appears to be at its lowest ever as companies are forced to downsize due to the increase in market competition and the recession.

In certain cases an insurance policy for unemployment us unlikely to pay out and it is important that the policy holder is aware of such situations. For example a pay out is unlikely during the initial exclusion period. This may mean that some policies will not pay out within the first six months of the insurance policy being purchased. Six months is a long time for an initial exclusion period and therefore people looking to purchase such insurance should shop around to find a policy that offers an exclusion period of around thirty days.

In the majority of cases unemployment protection insurance policies will only pay out if an individual has been made unemployed due to economic reasons. This therefore means that situations such as dismissal a policy may not pay out.

If unemployment occurs to an individual whilst they are away from the European Union for a period that is of more than ninety days and this decision was made by the policy holder and insurance company may not pay out.

If payment in lieu of notice is occurring this may also prevent the pay out of the insurance. Failure to have been in continuous employment for at least six months prior to an insurance policy being taken out is also a usual prevention of such insurance policies being paid out.

In order to assess whether unemployment insurance is necessary the general advice given to people is to work out what their total monthly expenditure is. If this amount is relatively high and they could not afford the payments of bills without a regular monthly income, people are advised to consider an insurance policy.

In order to claim the money from a protection policy, unemployment must have occurred and the policy holder must be in total unemployment. All insurance premiums must have been paid and kept up to date, failure to have done this means an insurance provider is in a position to deny payments.

Generally policies are offered of up to 2,5000 a month or a monthly pay out of 50% of a monthly income earned by an individual.