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Job Loss Insurance is optional insurance coverage that can be availed by a salaried or a self-employed individual. A self-employed individual can only avail benefits when there is loss/damage to the workplace due to fire, peril or the inability to access the workplace. The insured individual can avail benefits in case of retrenchment/employment/ termination/dismissal/lay off.

In these uncertain times, everyone would want to get insurance that covers them for their loss. The year 2020-21 has seen the largest number of job losses in the country and worldwide. People all over the world are suffering and surely would want to get themselves insured against their job losses. A Job-loss insurance policy is one of the best solutions against the loss of jobs.

Why is Job Loss Insurance, a must for every Employee

The benefits of Job Loss Insurance are discussed below

  • In most of these insurance policies, a pre-medical screening is not necessary
  • Provides a financial cover to pay for the EMI's for liabilities and home loans up to a specified period till the individual finds another source of income or employment.
  • Financial security in case an individual loses his job due to accident, disability or illness.

The criteria to be eligible for a job loss income is that the company an individual is working in must be a registered company.

 

Further, we will discuss the inclusions of loss in the Job Loss Insurance

  • Loans- The insurer pays the EMIs or the liabilities for the time being for which an individual has lost their job. In the meantime, the insured must make efforts and look for a new job or a new source of income in that time.
  • Critical illness- The insurer provides financial aid if the insured is diagnosed with a severe illness. The financial coverage is provided only in the case the illness is covered under the policy. If the illness occurs amidst the job period then the insurance company provides for compensation of loss of income during that period.
  • Disabilities- Income cover is provided for personal accident disability or death. It also includes permanent disability occurring due to accidents during the policy term. This is with the condition that it is permissible and payable under the policy.

The exclusions under Loss of Job Insurance are discussed below

  • If the insured loses the job due to his own fault like poor performance, cheating, fraudulent act, etc.
  • If the insured is seeking claims to a voluntary retirement
  • If the nature of the work done by the insured is casual, seasonal or temporary
  • Loss of job when the insured is in the probation period
  • Loss of job in the waiting or the processing period of the insurance policy.

Documents that are needed to be presented in the need of claim

To enjoy the benefits of insurance, the insured needs to provide proof of termination. A written proof is required when claiming for insurance. The insured will only get the claim once all the documents supporting the termination have been processed and checked thoroughly by the insurance company. If the termination from the job is voluntary then the insured cannot claim benefits as mentioned above also.

 

The insured needs to present the following documents once claiming for the insurance

  • Company Details
  • Details or copy of the policy documents
  • Proof of job/income loss
  • Termination letter
  • Salary slips
  • Claimant's ID and age proof
  • Duly filed and signed claim form
  • Other documents as required or asked by the insurer

The process for claiming insurance is fairly easy but it may take for the insurance company to process and verify the documents. If only all the documents provided by the insured are satisfactory can the insurance company go ahead and pay the amount to the policyholder.

  • In case a policyholder loses a job or source of income due to the reasons which stand legitimate, a written intimation needs to be provided to the insurance company along with the proof of termination.
  • The policyholder needs to submit all the documents that are needed at the time of claiming the policy.
  • Once the claim is approved and the documents are verified, the insurer provides the amount to the policyholder.
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