Insurance companies offer job-loss cover to employees in India

Kolkata: Finally, some sort of relief measures comes to the employees who were layed off. Insurance companies are coming forward to offer insurance cover that guarantees payment of some EMIs on loans availed, reported The Economic Times.

Initially, ICICI Lombard has started to offer such schemes and other insurance majors like Bajaj Alliance General Insurance have also come up with similar insurances. International markets like U.S. has already witnessed such schemes as companies find it hard to survive due to recession and liquidity crunch. For instance, Hyundai Assurance in the U.S. is offering to cover up to $7,500 of the debt on a new Hyundai car in case of a job loss as well as personal bankruptcy if self-employed.

ICICI Lombard's insurance cover also includes a mediclaim policy that ensures the payment of EMI for three months after someone has lost the job. "The job loss may be due to a closure of a division or a department on account of poor financial health or action of any public authority resulting in the closure of the employer's firm. The job loss may also be termination from employment due to illness. The premium for such a job loss cover is a factor of loan amount, policy duration, loan tenure, and age," said Sanjay Datta, Head, health & personal accident insurance, ICICI Lombard.

According to an insurance analyst, the cover offers a shield against job losses for a limited period, but at least, a beginning has been made at a time when Satyam employees are facing uncertainty while the economy is in turbulent times.

Bajaj Alliance had launched a job-loss cover product in partnership with financial institutions. A senior official of the company said, "We have a product that offers a cover of up to three EMIs in case of job loss." Unfortunately, the company could not find many takers for the policy then.

Interestingly, Flybe, a U.K-based airline is also offering a cover to its customers which allow them to claim a full refund on their travel costs if they lose their jobs. The scheme is applicable to passengers who book flights, hire cars and book hotels in January, and are due to travel before October 24.