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What Is Layoff Insurance?
Every year, thousands of Canadians lose their jobs, and with job loss often comes the loss of financial security. According to the Office of the Superintendent of Bankruptcy (OSB), job loss is one of the main causes of personal bankruptcies in Canada. Layoff insurance gives you the protection you need, so in the unfortunate event that you lose your job, you won’t lose your home as well.
How Does Layoff Insurance Work?
If you are laid off from work, your layoff insurance provider will pay a pre-determined amount directly to your mortgage lender. This allows you to keep your home and continue paying off your mortgage without going into debt. Layoff insurance benefits are non-taxable, and they won’t affect your EI claim either, so you can use your EI payments for other expenses knowing that your mortgage payments are taken care of. Watch a video about layoff insurance (opens new window).
Do I Need Layoff Insurance?
Since Canadian workers are eligible for EI when they are laid off, many people don’t think they need layoff insurance. However, when you look at how little EI pays out, you may change your mind. First of all, no matter what your salary was before you were laid off, the maximum amount you can collect from your EI benefit is $524 per week. Secondly, unlike layoff insurance, your EI payments qualify as taxable income. This means that, after tax, the maximum amount you can receive from EI averages out to around $1,750 per month. Even if you pay less than $1,500 for your mortgage every month, $1,750 per month doesn’t leave you with much income to live on.
What is Job Loss Insurance?
Job Loss Insurance is, you guessed it, another name for Layoff Insurance.
Job Loss is the Number One Cause of Mortgage Foreclosure...
...and disability is the second leading cause. Losing your job because of a layoff or disability is bad enough, but losing your home because of it is even worse! Job Loss Insurance - aka Layoff Insurance - when paired with life or disability insurance, can help protect you and your family in the even tof a job loss. Job Loss Insurance will even make your mortgage payments for you for up to six months while you get back in the workforce.
Goverment Employment Insurance (EI) Is Not Enough
Did you know that EI only pays a maximum of $524 per week (2015)? If you get laid off will you have enough savings to cover the difference? What if it takes longer to find a job because the economy has slowed? Are you willing to lose your home as a result?
Job Loss Insurance pays your mortgage so you can lean on EI to cover your other costs of living: the utilities, property taxes, groceries, the kids' activities - and more.
Benefits of Layoff Insurance
With a layoff insurance policy, you’ll get:
- Mortgage coverage for up to 6 months per job loss claim
- Portable coverage that moves with you and your mortgage
- Non-taxable insurance payments that don’t affect your EI claim
- No obligations: every policy comes with a 30-day money back guarantee, and you can cancel your coverage at any time without penalty
Do I Qualify for Layoff Insurance?
To qualify for layoff insurance you must:
- Be a Canadian resident who is eligible to claim EI
- Be between the ages of 18 to 63
- Have a mortgage
- Receive a T4 as an hourly or salaried employee
- Have worked a minimum of 25 hours per week for the last 30 consecutive days
Want to know more about layoff insurance? Talk to one of our layoff insurance advisors today, or complete the form below to get your free layoff insurance quote.