With close to 10 million Indians losing their jobs following the coronavirus (COVID-19) outbreak, financial uncertainty due to income loss has become one of the biggest worries.
To deal with the situation, the online insurance marketplace Policybazaar has set up a separate vertical dealing with job loss insurance products.
So far, these products were only available as an add-on benefit (to be purchased with an existing insurance cover). The new vertical will help customers directly buy these job-loss covers.
Policybazaar has partnered with insurers like SBI General, Shriram General, and Universal Sompo among others. These products offer income replacement for a fixed period.
As per the National Statistical Office (NSO), India’s GDP in the first quarter of 2020-21 contracted by 23.9 percent and while the economy shows positive signs of recovery in recent months, there is continued pressure on the private sector to generate employment opportunities.
At present, income/job loss covers are available as an add-on product with existing insurance policies. The new vertical by Policybazaar will help customers buy products online.
"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 instalments 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
These insurance plans not only cover loss of income due to job-loss but even cover consumers if they are self-employed. The insurance plans offer coverage under two different conditions, the first is when job/income is lost due to termination/lay-off or retrenchment, and the second is job/income loss due to disability or death.
In a scenario where the job/income is lost due to termination/layoffs or retrenchment, the plan helps by paying off loans for up to three months. In case, job/income is lost due to an accident resulting in death, partial or permanent disability, or disablement, the insured can get weekly salary benefits for up to two years.
There are different plans available for both salaried and self-employed individuals, and benefits offered under both, the categories vary from one plan to another.
In case of job loss due to termination/layoffs or retrenchment, the insurer pays the insured’s loan instalments for three months (the instalment amount is subject to the customer's existing EMI).The coverage for loss of income/job due to partial or permanent disability includes weekly salary benefit ranging as high as Rs 1 lakh per week (subject to customer’s net salary) for a maximum of 100 weeks.