TCS Layoffs / Tension increased due to TCS layoff, you take this insurance then there will be no problem

TCS Layoffs News: Tata Consultancy Services Limited (TCS), the country's largest IT services company, has decided to lay off about 12,200 employees this financial year. This is the biggest layoff in the company's history, with mid and senior level employees likely to be affected the most. The main reason for this is the focus on skills needed for the future and the large-scale adoption of Artificial Intelligence (AI). This incident has brought job loss insurance back into the discussion, which very few people used to take earlier. Let us understand job loss insurance in detail.

What is job loss insurance?

Job loss insurance is an insurance policy that provides financial support to a person in case of sudden job loss. It covers the necessary expenses until the person gets a new job. This may include:

Loan EMI

Rent

Electricity-water bills

Medical expenses

This insurance helps a person to run the necessary expenses without putting a hand in his savings. According to Gurdeep Singh Batra, Executive Vice President, Bajaj Allianz General Insurance, this is an excellent option for those who are worried about losing their job, especially in sectors like IT, startups and manufacturing, where layoffs are now common.

How does job loss insurance work?

Payment method

Job loss insurance has a pre-determined payment structure. This policy can work in two ways:

Monthly payment: A fixed amount is given every month during unemployment.

Lump sum payment: The entire amount is given at once.

Most policies have a monthly payment model, in which the person gets a fixed amount every month during unemployment. However, the payment starts only when the person remains unemployed for a certain period (waiting period).

For example, according to Batra, if a person takes a policy of Rs 10,000 per month, he can get this amount every month for three months. In some policies, the payout keeps increasing, like Rs 5,000 in the first month, Rs 10,000 in the second and Rs 15,000 in the third, so that the person remains motivated to find a new job.

How is the premium decided?

The premium for job loss insurance depends on the following factors:

Salary of the person

Period of the policy

Risk level of the job

Whether the policy is taken individually or in a group

According to Batra, the premium is lower in group policies (which are available through a company or bank). In high-risk sectors, such as IT or startups, the premium can be higher.

Who can take job loss insurance?

According to Sajja Praveen Chaudhary, director, Policybazaar for Business, this insurance is available only to salaried employees in the formal sector. Whether the employee is in a multinational company or a startup, if the company falls in the formal sector, he will be eligible for this insurance.

This insurance covers involuntary unemployment caused by the following reasons:

Structural changes in the company

Cuts in expenses

Government orders

Loss of job due to AI or automation

When will you not get a claim?

Claims in job loss insurance are not available under certain circumstances. According to Batra and Chaudhary, the claim may be rejected in the following cases:

Voluntary resignation

Early retirement

• Loss of job during trial period
• Loss of job due to poor performance, fraud or indiscipline
• Contract-based, seasonal or temporary job
• Loss of job due to pre-existing illness or epidemic
• If the employee is not on the direct payroll of the company

Is it right to take job loss insurance?

Job loss insurance works like a safety net, but there are some catches in it too. Many companies give 3 months' salary to employees during layoffs and then ask them to "resign". This is considered a voluntary resignation on paper, which can lead to the insurance claim being rejected. According to Chaudhary, companies do this to protect the employee's career so that their resume does not get tainted by layoffs.

Despite this, if the employee proves that he was fired, there is a possibility of getting a claim.

Other options to deal with job loss

• Apart from job loss insurance, there are some other measures that can provide financial security:
• Emergency fund: Save an amount equal to at least 6 months of expenses. This can be a big support in case of sudden job loss.
• Insurance with loan: If you have a loan, take loan protection insurance. With this, the insurance company pays your EMI in case of job loss, which keeps your property safe.
• Skill development: Learn skills related to AI and new technologies so that job opportunities increase in the future.