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Is layoff insurance right for you?

Originally Published on WKOW.com on Aug. 24, 2018


MADISON (WKOW) — When you think of insurance, a couple come to mind: car insurance, health insurance or life insurance. However, there’s a newer type of insurance making its way through the U.S. and it’s offered in Wisconsin. It’s called layoff insurance and it hopes to give buyers peace of mind in case they lose their source of income.

“People just have a lack of savings, a lack of ability to weather financial storms,” said Mark Greene, the chief strategy officer for SafetyNet, a company that offers layoff insurance.

The premiums are rather low and the payout is paid in a lump-sum within days after you get laid off.

“If somebody loses their job, we provide a benefit that is meant to help them pay rent, cover groceries, bills, but the piece of mind that it offers is hard to quantify,” said Greene.

Mechanical engineer John Leonard bought into a layoff insurance plan one year ago. He says he has a savings account, but wants that extra security.

“If I lose my job within the next few years, I still haven’t paid in as much as I would expect to get out, so it’s a net gain to me,” Leonard said.

J. Michael Collins is a financial expert at UW-Madison. He’s written about insurance and risk management and says although there are skeptics of layoff insurance — it can be beneficial for some — even the first line of defense.

“Income today is more volatile than it’s been in a long time,” Collins said. “And by volatile I mean it goes up and down. And the reason it goes up and down is because both people are getting jobs and losing jobs at higher and higher rates.”

Collins admits this new product is part of a business that’s also trying to make a profit, so folks should try to have a savings. But he says layoff insurance could benefit the younger generation.

“For younger people, their self-insurance is actually their parents so if I lose my job, I’ll go home and I’ll move into my parents’ basement so this might be a way to prevent this from happening or at least buy a little bit of time.”