Business Desk, ETV Bharat: At a time when the Indian workforce is dealing with high rates of unemployment and layoffs as an after effect of the coronavirus-induced economic slowdown, online insurance marketplace Policybazaar has launched a new vertical that allows its customers to buy job/income loss insurance products.
Through this vertical, customers can buy policies offered by some of India’s leading insurers like SBI General, Shriram General, Universal Sompo, and Aditya Birla Insurance.
Some of these insurance plans not only cover loss of income due to job-loss, but even cover consumers if they are self-employed.
“The growing middle class in the country needs options to safeguard themselves from sudden financial shocks as they tend to have liabilities of paying monthly installments to service loans. A loss of job/income insurance is the right policy to own to protect from such eventualities,” said Sarbvir Singh, CEO, Policybazaar.com in a statement.
If you want to insure yourself against the risk of income loss, take a detailed look on the key features and pricing of the job loss insurance product:
What exactly is the new job-loss insurance policy all about?
Policybazaar’s job-loss insurance vertical offers policies that aim to provide income replacement benefits to customers for a defined time period in case they lose their jobs due to layoffs, retrenchment, shutdown of projects, accidental disability etc, or if there is a loss of income due to damages to workplace or due to illness/disability (in case of self-employed).
Is it a new line of product?
Currently, job/income loss insurance covers are not available on a stand-alone basis in the market and are sold as a rider along with other high-value insurance products like home insurance. Now, customers can purchase small-ticket policies as well to insure themselves only against income loss.
What benefits are offered by the job-loss insurance plan?
Different insurers have different plans for both salaried and self-employed individuals, and benefits being offered vary from one plan to another.
Basically, coverage is offered under two different conditions, the first being where job/income is lost due to termination/lay-off or retrenchment, and the second condition being where job/income is lost due to disability or death.
In case of job loss due to termination/layoffs or retrenchment, the insurer pays the insured’s loan installments for 3-months (the installment amount is subject to the customer's existing EMI).
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In case, job/income is lost due to an accident or illness that results in death or partial/permanent disability, the insured can get weekly salary benefits for up to two years. The weekly benefit range is as high as Rs 1 lakh per week (subject to customer’s net salary) for a maximum of 100 weeks.
Customers can even enjoy tax rebates under Section 80 (D) of the Income Tax Act on premiums paid against these policies.
How much premium do you need to pay for these policies?
The premium for these policies depends on your salary, loan amount, EMI, and the weekly benefit you want to avail in case of income loss. Below are certain examples to give you an idea of the pricing of the products.
1) If you have a loan amount of Rs 15 lakh and an EMI amount of Rs 15,000, then you can buy plans with premiums starting from Rs 2,070 per annum to pay your three-month EMI of Rs 45,000 if you are terminated from your job. However, it is payable only in cases of termination, dismissal or retrenchment and not in cases of dishonesty, fraud etc.
In case you don’t have a loan, and just want to secure your income, there are also plans starting Rs 499 per year that offer benefits of Rs 5,000 per week up to 100 weeks if you lose income due to accidental disablement/disability.
Note that policies offering weekly benefits are offered only in case of job/income loss due to accidental disablement/disability and not layoff and retrenchment. Also, the weekly benefit amount in any case cannot exceed 25% of your net salary, for the disability period up to 100 weeks).
You can also opt for smaller cover with a weekly benefit of Rs 1,000 per week up to 104 weeks of disablement that starts at an annual premium of Rs 104.
2) Similarly, in another example, if you earn Rs 20 lakh per annum and want a weekly benefit of Rs 10,000 in case of disablement, then you can buy a policy with premium starting at Rs 622 per year.
How to buy these policies?
Go to Policybazaar.com, click on the job loss insurance tab, submit your details like name, age, salary/income, loan and EMI amount and phone number. It will show you the list of products offered by insurers along with the benefits and premium. You can choose your desired product and buy online.
