Why you should buy an Unemployment Insurance?

David Esteva
Web Developer

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Did you know that most Latin American countries operate with work termination compensation plans? These plans provide for the delivery of a single sum as compensation to help unemployed workers get out of trouble while their unemployment lasts. However, in recent years unemployment insurance plans have been introduced, in most cases complementary to termination benefits, however, the access rules are somewhat restrictive. For example, in Mexico it is restricted to workers between 60 and 64 years of age.

Did you know that most of the Latin American countries operate with a work termination compensation plan? These plans are provided for the delivery of a single sum as compensation to help unemployed workers to get out of trouble while thier unemploument last. However, in recent years unemployment insurance plans have been introduced, in most cases complementary to termination benefits, however, the access rules are somewhat restrictive. For example, in Mexico it is restricted to workers between 60 and 64 years of age.

Likewise, all the countries belonging to the OECD (Organization for Economic Cooperation and Development), among which Chile and Mexico stand out, have reduced the protection provided by their unemployment benefit systems in the 1990s. The rules for accessing them have been tightened, in addition to the duration of benefits.

It is common that at some point in our lives we go through a stage of unemployment, where incomes are reduced considerably and we feel unprotected. Despite the existence of the public unemployment benefit, it is sometimes not enough to cover expenses and bills (food, services, rent, among others).

Having general unemployment insurance is one of the ways to protect yourself in the event of a layoff. In the event that the owner loses his job, the contracted policy will guarantee him for a certain time, an economic consideration.

This type of insurance has evolved over time, which is why it is currently common to find various modalities in terms of coverage, which can be the payment of a fixed amount per month, payment of monthly receipts and even greater provision in terms of credit card.

What should we take into consideration about this insurance?

1.- In general, this type of insurance protects employees with indefinite contracts, with which companies guarantee that they will be able to keep you without setting a specific time. That is why you must have a minimum of six months in most cases, to be able to hire it.

In the same way, everything will depend on the profile of the employee, since some people are hired for a certain project (and the time it only lasts), which is why the insurance would cover the time stipulated in said contract and then the coverage would not apply.

2.- In order to benefit from this type of insurance, a grace period is established between one and two months, with a time limit of months where the policy can cover the unemployment situation depending on the maximum compensation.

3.- It is necessary to take into account if there is any monthly payment limit (since the policy sometimes covers only a percentage of those payments).

4.- The restrictions of these insurances in various situations such as an early retirement, a job resignation, among others, since each one includes different clauses.

Taking out unemployment insurance guarantees financial security in the event of an unexpected stage of unemployment, thus offering a livelihood for the contractor while he manages to position himself as an active worker again.

Knowing all this, it is worth remembering that with LISA they can fully automate the settlement of Unemployment Insurance, quickly and effectively, reducing their operational costs by up to 60%. Get in touch with us!

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