Lay-Off Insurance Helps Workers With Little Savings

Jul 9, 2018

Iowans concerned about their job security can buy some peace of mind with a new type of insurance. Iowa is the second state to offer layoff insurance to workers, after Wisconsin.

The plans, which pay out a lump-sum if a person is laid off or becomes unable to work, are expanding now to additional states.

Mark Greene, director of SafetyNet, the company that created this type of insurance, says too many people don’t have enough savings to deal with a sudden disruption in their income.

“We’re meeting the reality that people find it extremely hard to save,” Greene says, “and of course we encourage saving, but this is an option that we didn’t see in the market. There weren’t a lot of options for people that run into this situation.”

When jobs offer disability insurance, Greene says, it’s typically tied to the amount a worker was earning.

“What we’ve done is kind of flipped that on its head and said you know what? This is meeting this a different way,” he says. “We’re asking the consumer to decide how much they need, should they run into this situation.”

Greene says the SafetyNet plans also do not preclude participation in an employer-offered disability plan, nor do they impact a person’s eligibility for unemployment benefits.

Interest in lay-off insurance has been high, Greene says, though he declined to say how many policyholders there are. He added most states have no specific regulations for lay-off insurance.