What Should I Consider before I Buy Unemployment Insurance?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 20 September 2018
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Many consumers buy unemployment insurance as a way of augmenting benefits available from other sources and creating a source of revenue that can help manage household expenses until new employment can be secured. Evaluating unemployment insurance programs is essential before settling on any plan, and calls for identifying exactly how a given plan will work with other unemployment benefits to keep the household budget balanced. In addition to considerating the scope of benefits provided, attention should be given to the amount of coverage provided with specific benefits within the plan, and the cost of the premiums.

In order to buy unemployment insurance that is a good fit, take some time to understand how the benefits will work with other resources at hand. In some cases, this type of insurance focuses on providing cash disbursements directly to the insured party, providing funds to use for everyday expenses such as food, clothing, or paying utilities. Other plans are narrower, in that they provide a means of making payments directly to creditors and lenders for specific debts such as loans and credit card balances. Make sure the provisions of the plan will provide the type of support necessary to keep current with your debts, along with all other sources of revenue.


Understanding the provisions and exclusions found in different plans is also very important before you buy unemployment insurance of any type. Some plans will exclude any claims that occur for a period of time after the insurance is established, ranging from anywhere between 90 and 180 days. Others will cover certain types of events such as layoffs but will not cover others such as resignations. Obtaining the broadest possible scope of coverage means you are protected under more circumstances, a factor that may come in handy if there is a need to leave a job for a legitimate cause.

Cost is also an important factor if you want to buy unemployment insurance. Make sure there is a balance between the range of benefits provided and the amount of the monthly premium, with both factors being within reason. The goal is to obtain the most possible benefits for the lowest premium possible, while still doing business with a reputable insurance provider. As long as the premiums can be included in the monthly budget without a great deal of distress and the scope of cover is sufficient to work with other resources and keep the household operating properly, the decision to buy unemployment insurance offered by the right provider at the right price will make dealing with any periods of unemployment much easier.



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