Sudden, unexpected unemployment can introduce a series of troubles in a person’s life. Several expenses, loans, bills and even savings are at stake if a situation like this arises. On top of that, many families and individuals mostly have a single source of income. Losing a job in such a situation can introduce several unwanted hardships with no resources to deal with them. Involuntary loss of employment insurance or job-loss insurance in the UAE is a tool that can be very helpful in managing your finances in such unfortunate times. A job-loss insurance plan comes into effect when the plan holder loses their job for reasons they had no control over. The insurance cover helps in paying a part of your loans or bills and covering other finances.
What is a Job loss Insurance Cover?
Simply speaking, job-loss insurance in the UAE offers you compensation if you lose your job. This compensation can either be a lump sum or distributed over several months. Some job-loss insurances in the UAE may also offer this compensation differently. Depending on your provider, a job-loss cover can help in covering a part of your credit card expenses, loan amount or lower the interest rate on your further credit card expenses. The main thing to consider here is the reasons for which one loses their job. Voluntary quitting your job is not covered by a job-loss cover.
What is Considered as Involuntary Loss of Job?
The factors that define the involuntary loss of a job can be a little hard to segregate when it comes to job-loss insurance covers. On a basic level, if you lost your job due to reasons like firing and lay-offs, it is considered as an involuntary loss of employment. However, further layers can be added to this condition as well. If the lay-off was a result of poor performance or anything faulty on the part of the employee, the job-loss cover may not come into play.
What is Covered in Unemployment Insurance UAE?
The benefits offered by a job-loss insurance plan can highly depend on the insurer. The basic benefits that may be offered by a job-loss cover are:
- Compensation amount after losing the job for several pre-decided months.
- Relaxation on credit card bills.
- Relaxation on annual percentage rate or APR.
- An accidental death benefit is in case the insured meets an unexpected demise which results in the loss of income.
Exclusions of Job Loss Cover
The following scenarios and conditions can be considered as exclusions or render your job-loss insurance in the UAE inapplicable:
- If the job you have lost was not permanent. This includes any kinds of contractual, part-time, freelance, temporary, seasonal, and casual jobs.
- If the loss of income happens during the pre-specified waiting period of your job-loss insurance plan.
- If the policyholder loses their job involuntarily, but for reasons such as fraud, poor performance, etc.
- If the loss of a job occurs during some sort of a probation period. Employees on probation are not technically considered permanent employees.
Most banks and financial institutions offer job-loss insurance covers along with credit cards, personal loans, personal accident cover and life insurance in the UAE. This means that a job-loss cover can only be taken as a complementary benefit when you register for a credit card with a bank or take personal loans. There are a few financial institutions and insurance providers that provide this cover even without any active loans or credit cards.
Latest Unemployment Insurance Update in UAE
Beginning on January 1, 2023, UAE nationals and residents working in either the federal government or the private sector will be allowed to sign up for the Unemployment Insurance Scheme. If a worker's basic salary is AED 16,000 or less, the cost of the subscription will be AED 5 per month (AED 60 annually). Workers with salaries higher than AED 16,000 will need to pay AED 10 per month (AED 120 annually). The compensation for those in the lower category must not exceed AED 10,000 monthly, while those in the higher category cannot receive more than AED 20,000. Subscription can be paid on a monthly, quarterly, half-yearly or annual basis. Additionally, the insured worker may coordinate with the insurance company to obtain additional benefits. The total cost is subject to VAT.
Workers may subscribe to the scheme via the Insurance Pool website and its app (Dubai Insurance Company) and any other channel which MoHRE may announce.
List of Subscription Channels
1. Insurance Pool's website (www.iloe.ae) & its smart application
2. Bank ATMs & Kiosk Machines
3. Business service centers
4. Money exchange companies
5. Du and Etisalat
7. Other Channels that MoHRE specifies with the service provider (insurance company)
Top Job Loss Insurance Providers in the UAE
Most job-loss insurance providers are either banks themselves or insurance companies working in collaboration with them. Given below are the top few providers of job-loss insurance in the UAE:
#1 Protect Plus from NBD
- Offered to all NBD credit cardholders.
- All credit card holders are auto-enrolled for this job-loss protection insurance when they register for their cards.
- The bank offers a 10% relaxation on a credit card due amount capped at AED 4000 in case of job loss in the UAE.
- The APR is also brought down to 0.99% for the outstanding due amount on the credit card in case of job loss.
- The credit cardholders get the initial two months of the insurance benefits free of charge, i.e. without paying the premium.
#2 Job Loss Takaful from Dubai Islamic Bank
- This job-loss takaful plan is provided to anyone who has a permanent job in the UAE and documented proof.
- There are two variants of this plan – one for people with less than AED 3000/month salary and one for people with AED 3000 - AED 5000/month salary.
- Variant one offers a monthly coverage of AED 1000 with AED 8 as a monthly premium amount.
- Variant two offers a monthly coverage of AED 4000 with a premium of AED 10.
#3 Secure Life Insurance from ADCB
- Job-loss or involuntary loss of employment cover comes as a part of the Secure Life Insurance cover from ADCB.
- Provided to all qualifying applicants.
- Assured sum protection of up to AED 350,000.
- Cover of AED 6000 each month after job loss in the UAE for 6 months.
- Charges AED 20 as a monthly premium amount.
#4 Lifestyle Protection from Najm Bank
- Offered to the primary cardholder of Najm Bank.
- If the primary cardholder loses their job, the bank offers relaxation of 10% on the credit card due amount for up to 12 months.
- The 10% benefit amount is capped at AED 4000 per month.
#5 Lifestyle Protect from Mashreq Bank
- Provided by Oman Insurance Company in collaboration with Mashreq Bank.
- Offer Involuntary Loss of Employment benefit along with a few other life protection benefits in case of an unforeseen accident or event.
- Available only for salaried individuals. Minimum salary required to be eligible – AED 3500.
- Provides employment and loss of income protection cover for 3 months after the job loss.
#6 Lifestyle Protect Plus from FAB
- Offers up to 3 months of coverage after job loss in the UAE.
- The cover amount can range between AED 1000 to AED 4500 depending on the type of plan and premium you have chosen.
#7 Covered Cards Takaful from ADIB
- Available for ADIB cardholders only.
- Offered by Dubai Islamic Insurance and Reinsurance Company in collaboration with ADIB.
- 10% of the present balance in the cardholder’s account is paid as compensation in case of loss of employment.
- The maximum amount paid is capped at AED 4000.
- The involuntary loss of employment coverage lasts for 6 months after the event.
Eligibility Criteria for Job loss Insurance in the UAE
The eligibility criteria for getting job-loss insurance in the UAE can differ for all providers in most cases. If the insurance is being provided by a bank with a credit card or loan, you need to have either of the two to get job-loss insurance in the UAE. Given below are the basic eligibility criteria that apply in almost all cases:
- You must have a valid UAE resident visa or citizenship proof.
- You must have a permanent, full-time job with documented proof. Any temporary or other kinds of jobs do not generally qualify for job-loss insurance in the UAE.
Job Loss Insurance Claim Process
Every provider has a slightly different procedure when it comes to the claim procedure of job-loss insurance plans. It generally requires you to fill up the custom-designed form by the provider and submit it to begin the claim process. After the basic required investigation, the promised cover in the insurance plan begins and you start receiving the compensation amount.
Job-loss insurance in the UAE is well worth an investment to deal with complicated financial times smartly. Apart from the aforementioned providers, several other financial institutions offer this small but significant cover combined with life insurance plans, credit cards, bank accounts, etc. Consider it as an added layer of much-needed protection for all of us. Just make sure that you always check out the complete list of benefits that you will get when buying job-loss insurance in the UAE. Stay alert, compare well and buy smart to deal with job loss in the UAE tactfully.