What To Do If You Suffer A Loss of Job and Income

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Tuesday, December 2nd, 2008 Subscribe To Our Feed

Job terminations and layoffs are becoming a prevalent new item due to current economic conditions. Companies that were the bulwark of American stability, are now becoming shaky and unreliable. The time is long past when a person could go to work for a company and count on working at that position with that company until he or she retired.

Every day there are more headlines depicting more job terminations and layoffs. When one is terminated from a job, a huge problem occurs in that it takes time to look for a new position. It is usually a full time endeavor to pursue a new career. Your resume must be updated, you have to call for interviews, follow up, search for positions in your field, etc. While all of this is happining, you still are required to meed your monthly obligations, protect your credit, and maintain the lifestyle that your family is used to.

One strategy is to purchase a job loss insurance protection policy. Up to this juncture, individual coverage has not been available, only a group arrangement through your mortgage company when you purchased a mortgage. Now this type of plan can be purchased on an idividual, stand alone basis. Benefits can be paid up to $1,500 per month for a period of 4 months. The cash benefit is received in addition to regular state unemployment benefits.

There are certain restrictions that must be met such as a four month, “active at work” clause, and you have to have been terminated for more than 30 days before benefits can begin. Also, you must file your taxes as a W-2 employee, not as a self employed person. Even so, this plan is a necessary component in any financial forecast. You can use the money you receive for any purpose you choose, such as bills, mortgage payments, grocerices, and car payments.

Note the following statistics:

The average length of unemployment in the United States is 16.5 weeks, according to the US Labor Department and Training Administration. Also, according to government statistics.
The chance of an employee becoming unemployed during his or her working career is 90%.
The average weekly State Unemployment benefits amount to only $299, while most families have expenses that are 2 to 3 times that much. 38% of Loan Delinquencies and Home Foreclosures are caused by unemployment, according to a 2007 government study.

It really doesn’t matter what firm you work for anymore, in that we are living in such a volatile economic environment, just about anything could happen. Who would ever have foreseen such corporate giants as General Motors, Ford, Lehman Brothers and Bear Stearn as having financial trouble? Situations such corporate downsizing, mergers, takeovers, companies going out of business, and mass layoffs are beginning to occur quite frequently, which could possibly affect you in a major way. Many times we do not see these things coming and are not aware of these events until they are upon us.

The prospect of dealing with the stress and focus of applying for new work while, at the same time, having to deal with financial turmoil, could seriously affect your attitude and demeanor while interviewing. This stopgap measure, is a must for consideration in your overall planning for your financial future.

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