In the hustle and bustle of the daily grind and the mind-numbing commute, people always complain about hating their jobs and dreading going to work. With that, employees often take for granted the steady stream of income that comes with a job, until, of course, one loses it. Then the bills pour in, the phone goes unanswered, the mail piles up on the front steps, and an eviction notice soon gets tacked on the window. Is there really life after losing your job? For most people, that dark and gloomy situation is a dreaded scenario that nobody wants to experience. Luckily, private unemployment insurance can save the day-and your future. Or can it?
Accident, Sickness, and Unemployment Insurance
In the simplest terms, the way unemployment insurance works is you pay a certain amount regularly to your insurance provider until you lose your job for whatever reason (accidents, sickness, termination, etc.) covered by your insurance terms. Then, you basically reap the benefits of your premium-you get paid monthly so you have, at the very least, something to get you by as you struggle with looking for a new job. This payout period usually lasts for about 6 months. When combined with government unemployment benefits, this insurance can help you stay dry indeed during the rainy seasons of your life.
IncomeAssure: Six-Month Unemployment Coverage
The major provider of unemployment insurance is IncomeAssure from the Assura Group of New York. It says that even though state unemployment benefits should ideally replace 50% of previous income, the claims are clearly not enough due to state caps. You have to apply for their insurance policy while you are still employed to fund your premium, and when you get laid off, there is a two-week period of receiving unemployment benefits before you can begin your IncomeAssure claim. For 6 months, you can receive benefits with varying factors such as your previous industry, your income, and your state. In short, you can get insured for $50,000 to $250,000 of income, and the coverage costs 0.5% up to 2% of your gross annual salary.
Unemployment Insurance Providers: Where Are They Now?
While it’s true that unemployment insurance does keep you covered when you’re jobless, many financial institutions have advised against it. Steven Weisbart from the Insurance Information Institute even said that a savings account could be a better option if there’s no threat of getting laid off any time soon.
PayCheck Guardian used to be an unemployment insurance provider that offered the same services as IncomeAssure. Rainy Day Foundation, among others, also helped employees pay for-at the very least-their mortgages. Why have both these providers stopped?
An article from MLive.com computed the pros and cons of unemployment insurance. Despite the fact that it only pays out for 6 months, a jobless person cannot claim his benefits if he does not qualify for state unemployment insurance. If, for instance, you are receiving $500 a month from your insurance, then the calculation goes, “$500 a month for six months is $3,000. If you saved $60 a month for four years and put it in your own savings account paying 2 percent interest, you’d have saved more than $3,000 in four years.”
Is unemployment insurance, then, actually a security for your future? Or does a savings account provide better protection during the storm? Whether or not it is a good idea is up to you.
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