- It is always advisable to be prepared for any financial crisis
- Some insurance providers also offer job-loss covers
- Job-loss covers are usually 'bundled typically with home loans in India'
One can consider it for "financial obligations such as home loan repayments or a delicate employment status," Mr Sarin adds. In case of a job loss, "the insurers typically pay three home loan EMIs (equated monthly instalments)" depending upon specific conditions.
However, these job-loss covers have their own set of limitations. "Despite having a cover for income replacement, it might not kick in. It only kicks in when someone loses the job. The reality remains that not many people in India are fired by their employers or are handed pink slips," Mr Sarin said.
"The lay-off process is typically avoided. Employees are mostly pressurized to resign except in some situations like mergers and acquisitions," he added. Still, this add-on risk cover could be handy in some scenarios, he further said.
Mr Sarin also highlighted the need to provide complete details to avoid any rejection while filing for a claim. "Written proof of retrenchment is one of the crucial documents that is required to assess the cause of job loss. Only then you will be eligible for the claim."
He also suggests that customers opting for this cover should know about all the terms and conditions of these plans since job-loss policy triggers only if the termination is due to the conditions included in the policy, not due to resignation by the policy holder.
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