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What If You Are Laid
Off?
Many credit card issuers also offer protection for those who
have lost their jobs through no fault of their own. Like the
disability and life insurance, credit card protection for
unemployment is based upon a percentage of your unpaid balance.
Whether this kind of insurance is important to you depends on
many things. Certainly, if you are a business owner with a
business that is doing well, you don’t have to worry about
being unemployed. This insurance is not for illness or anything
of that nature; it is solely for those cardholders who find
themselves out of work due to layoffs, downsizing, company
closings, and other similar situations.
The thing to remember about the unemployment insurance is that
it will not cover anyone who quits their job with no valid
reason – works similar to unemployment compensation in that
respect. The rules state you must be unemployed through no
fault of your own; however, there are circumstances that would
justify that just as there are circumstances under which you
can quit your job and file for unemployment, namely those
incidents in which the employer is violating the labor law in
some way.
Even if you have held the same job for many years and have
never faced a layoff, with the economy being what it is today
and with companies merging and downsizing, it’s a good idea to
protect yourself. It’s not uncommon for companies to force
older workers into retirement, and if your company doesn’t have
a nice severance package, you can be financially ruined. Taking
insurance to cover your payments should you become unemployed
is a good way to prevent that from happening. Remember, the
older you are, the more difficult it is to find more work, and
in the present state of the economy, companies are seeing how
they can do more with less people. No one’s job is secure
today, thus the reason many people are opening businesses or
starting businesses at home.
The rate for the insurance is going to vary from card issuer to
card issuer, so if you have more than one credit card from
different issuers, do not assume the rates will be the same
even if the balances are close. Like all insurance, there can
be a number of reasons for this including a large number of
claims and the number of participants in the program.
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