Employment Insurance
Employment insurance is a type of insurance which provides financial support for a policyholder in the event that the policyholder loses his or her job. As such, employment insurance is, in fact, translated into unemployment benefits. Employment insurance may be provided by the government as a form of social security insurance or as government financial aid. In this case, employment insurance may refer to the fund provided by the government to cover the living expenses of a person who unexpectedly loses his job. Employment insurance of this type is usually available only for a short period of transition until that person finds another job. Also, there are employment insurance policies available for purchase in private insurance companies.
Employment insurance, in some cases, is sold as part of a credit card or loan package from banks or lending institutions. In this context, employment insurance becomes a form of liability insurance from which the policyholder does not directly benefit. Employment insurance of this type does not serve to provide funds that cover the cost of living. Rather, the only purpose of this type of employment insurance is for the policyholder to provide guarantee to the bank or lending institution that the loan will be paid, even when the policyholder suddenly loses his or her income.
What does employment insurance cover?
Employment insurance covers costs and liabilities incurred by an insured person when he or she suddenly loses his or her job. The types of financial aid provided by employment insurance are "cost of living" allowance as well as payment for financial obligations, such as loans.
The financial assistance provided by an employment insurance policy is affected by a variety of factors. In general, the amount of the employment insurance entitlement depends on the length of time, or tenure, that an insured person had been working in a company before he or she lost the job. The amount of salary, number of dependents, and hours worked also have a corresponding effect on the entitlement of employment insurance. For instance, when filing an employment insurance claim, a person who worked for a longer period and earned higher income may have a higher entitlement compared with a person who had been employed for a shorter period of time earning a smaller salary.
Why would you need employment insurance?
With the consistently changing economic conditions, anyone who had been working in a company knows that nothing and no one is indispensable. Hence, if you are an employee, it is a wise decision to get an employment insurance policy to provide financial support in the event that you suddenly lose your job and income.
