Private sector Bharti AXA General Insurance is all set to launch an unemployment protection cover, aimed at employees who fear the axe. The plan kicks in when the insured faces involuntary termination due to closure of the company as a whole or its divisional office, provided the firm employs at least 20 people. The closure could be due to poor financial health, mergers and acquisition or violation of laws.
“The plan covers loss of income up to a certain limit and specified period, which will be determined upfront. Although there is no minimum sum assured, it would ideally cover at least three months of income loss,” Amarnath Ananthanarayanan, CEO of Bharti AXA General Insurance, said.
The company has applied for approval from insurance regulator IRDA for both group and individual unemployment insurance plans. Any salaried employee would be eligible for the cover, which would kick in after three months of income loss. It would provide a general credit risk cover and would pay EMIs and credit card bills of the insurer for some months.
Though most western countries provide social security and unemployment benefits, retrenched workers in India only have their provident fund deposits to depend on. Savings from the EPF can be withdrawn when unemployed. This means such customers can be a niche market for private insurers.
In 2009, ICICI Lombard had launched a scheme called Secure Mind which paid EMIs on loans in case of job loss. But job loss was an additional feature on the policy, which also covered credit risk cover against major illnesses and personal accidents.