In the event of a person becoming unemployed, unemployment insurance provides them with an income. To be eligible to take out unemployment insurance a person must be at least 18 years of age but under 64 and be employed for at least 16 hours a week. Unemployment insurance covers a person in the event of them being dismissed from work or become too sick or disabled to carry on their employment.
Unemployment insurance is sold under many names, often with slightly different terms and conditions. Some promise to pay a person’s mortgage payments should they become unemployed, some a monthly allowance until a person finds work and others simply offer a lump sum. Depending on the type of unemployment insurance a person takes out, the premiums will vary drastically. Often when taking out a mortgage, finance on a car or a credit card, some form on unemployment insurance will be offered. To claim on their unemployment insurance a person must have lost their job to involuntary unemployment and be completely out of work. They must also have paid all their premiums and have been in continuous employment prior to their first claim. Generally, a person must have signed a Jobseeker’s Agreement or similar and present a copy to their insurance firm. If this is not the case, the person must be unable to work solely due to a disability and be able to prove that their disability is the reason they cannot work.
There are several cases when a person who has become unemployed cannot claim unemployment insurance. If a person knew, when a policy was taken out, that they were going to be made unemployed or their unemployment occurs shortly after the policy has been taken out they are likely to be illegible to claim. A person will also be prohibited from claiming if they accept voluntary unemployment, resign, retire or accept early retirement. If a person breaches their contract or becomes unemployed as a result of their conduct they will not be eligible to claim, likewise if unemployment occurs due to the person committing a crime or taking industrial action.
In addition, there are several cases when a person has become disabled where they will not be able to claim unemployment. Similarly, if the person knew they were to become disabled they are not allowed to claim on their unemployment insurance. If the disability is due to drug abuse, self injury or a pre-existing medical condition then a person will also not be able to claim. Unemployment insurance will generally end in event of a policy holder’s death or retirement, if the policy holder emigrates or fails to keep up to date with premiums or if either the insurer or customer cancels the policy.
In a recent article in the Guardian, Lisa Bachelor compared several unemployment insurance policies available and came to the conclusion that unemployment insurance is not always worth having, especially if a person is self employed or nearing retirement age. She suggested a much more comprehensive approach to covering a person’s self from unemployment called a permanent health insurance policy, which pays a long term and regular income to a policy holder should they become too ill to work.