Job market is more uncertain today than ever. The hitherto glossy IT sector that scripted the unprecedented boom in jobs and salaries to engineering graduates enabling subsequent shift of households from lower middle class to middle and upper middle class is slowly but steadily losing its sheen.
Also read: More layoffs in IT industry, is H-1B visa the only reason?
Automation, 3D printing, India’ demographic dividend causing increased competition among jobseekers and dismal growth rate of industry, all combine to form a picture that is worrying for any head of the family who is employed with some enterprise, large or small.
Amidst all these concerns is a ray of hope, Job Insurance Cover.
A job insurance policy is similar to all other insurance products that make the insurer liable to pay a predetermined sum (cover) in an event of loss to the buyer of the policy and this is in return of periodical premium paid by such buyer. On its face any insurance policy can appear promising; the need hence is to go through the contract wisely prior to making a commitment.
First things first. Such a policy will provide only limited cover, not reassurance of full salary to the buyer of the policy for an indefinite period of unemployment. Second, the liability of the insurer to pay the cover to the buyer will only kick in when the loss of job is due to lay off by the company, not due to voluntary resignation or removal owing to under performance or fraud.
Let’s go back to the initial question. Do you need this cover or is it just an addition to the consumerism spread via effective marketing?
For a modern household comprising of a husb and, wife and their children in a Tier-1 or Tier-2 city, many expenses are run on credit. These can include monthly instalments for home loan, car/ two wheeler loan, credit card bills and premiums on health/ life insurance. A default in payment of any of these liabilities can be both insulting as well as deteriorative for the family. The job insurance cover may not promise outright protection but can assure of a breather during hard times.
From Home Suraksha Plan of HDFC Ergo to Safe Loan shield offered by Royal Sundaram and Secure Mind by ICICI, you can opt for a plan that suits your needs.
Buying a cover, however, will not be enough. As mentioned earlier, job insurance covers do not cover voluntary resignation by the buyer of the policy and the concern here is that most of the employers in India resort to pressurizing the employee to resign from service than opting for a rough lay off. This means that a documented proof of retrenchment from employment is a must for the policyholder to be sure of a cover paid during the unemployment period.
You must weigh your needs for this product; in case of sectors like IT and telecom that are already stressed, it may be better to be insured than be shocked by unpleasant surprises.
