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Involuntary Unemployment: Protecting Employees from Income Loss

Black and white photograph of office workers discussing a document, with two women highlighted by an orange circle

“We’re sorry to inform you that your job role has been made redundant.”

“Budget cuts have forced us to make the difficult decision to terminate your position.”

“Thank you for all you’ve done but your services are no longer needed.”

It doesn’t matter how it’s worded, or how politely, becoming involuntarily unemployed is a tough, stressful situation for any employee to find themselves in. One of the biggest concerns is what they will do for income while out of work.

With US layoffs already reaching around 250,000 this year, job security is on the minds of many employees. In these troubled times and with layoffs increasing, how can micro insurance help when life happens?

What about income protection insurance?

Typically, income protection insurance coverages are available to full- and part-time employees for when they are unable to work due to health (sickness or injury), through forced unemployment, or a combination of each. These coverages pay a percentage of a person’s salary – often until retirement for health related reasons –  however in cases of unemployment, payments last for a set period, usually 12 months. Premiums are based on the percentage of salary that an individual wishes to receive and individual’s chosen deferred period (ranging from 30 days to 52 weeks). When unable to work for covered reasons, a claim is made, and monthly payments are given after the deferred period.

This sounds good on paper – but while income protection insurance provides a year of cover for unemployment, it can be quite costly to purchase. This is an added expense that many cannot justify in the current economic climate. In the UK for example, according to investment management firm Charles Stanley (as reported by Wales Online in October 2022), just 7% of adults claimed to have income protection in place and 18% were planning to give up or had already given up insurance policies to keep up with the rising cost-of-living. A year later, the cost-of-living crisis is still very much with us.

Based on these reported figures – and assuming that the figures are similar today and elsewhere in the world – it’s less of an insurance protection gap and more of a chasm!

The solution? Affordable involuntary unemployment protection.

With layoffs happening more regularly, the insurance protection gap is in urgent need of filling. Micro insurance is one answer to this issue.

Our MiIncome digital reinsurance solution has been designed to look after people’s short-term personal finances, by putting money in their pockets to cover the inconvenience of redundancy. The Layoff trigger has been specifically written to provide lump sum payments for a set period when made involuntarily unemployed. We recently launched a program with Grid in the US for this purpose, providing up to USD$4,000 over two months to laid off customers.

MiIncome, and micro insurance generally, brings the major benefits of affordability and convenience. Traditional insurance aims to provide comprehensive solutions that cover full repair or reparation costs with multiple steps to enrol and therefore can be very expensive because the limits are very high. Micro insurance on the other hand is designed to offer quick payments and target short term issues with subsequently lower limits, simplicity in operation and lower costs; with a goal of a couple of dollars a month and can be signed up to in just a few short steps. So long as employees meet basic requirements, they can be covered. Employees therefore get immediate cover to bridge a gap rather than full long-term income replacement coverage, but for many this is an affordable safety net while they find a new job.

The next question is, how do employees access MiIncome and how does it work?

💵 Support your customers with MiIncome.

To find out more about our MiIncome product and how we can work together to create a solution tailored to your business, get in touch with us now.

How does a MiIncome digital reinsurance solution work?

We work with insurers and platform partners to reach their customers through integrated solutions. Working closely with you: we tailor MiIncome to your needs, developing a product that is highly relevant and desirable to your target market.

Your MiIncome digital reinsurance solution is developed with our Operations and Underwriting teams, who analyse your proposition and set pricing, terms, and conditions.

To bring the product to life, our tech and operation teams work with you to integrate it with your app or web service via API. We hook into your forms to receive and validate submissions, ensuring that  customers and employees are eligible for coverage.

When individuals need to claim, our AI powered process quickly assesses and settles*, providing timely payments to our local insurance partners, so that you can help your customers get on with their lives with less financial burden.

Furthermore, MiIncome doesn’t just provide benefits to your customers – it differentiates your product offering from your competitors, creates a new revenue stream, and adds value for your customers with boosted retention and satisfaction. Your customers can trust that you’ve got their back when faced with layoff.

Enabling your customers to bounce back from involuntary unemployment.

No-one wants to receive news of unemployment, and employers don’t want to have to give it either! With MiIncome protection in place, employees have peace of mind that should they receive notice, they have a financial safety net to continue paying their household and living expenses while finding a new job. Providing MiIncome shows that your company cares about the financial wellbeing of your customers.

So, for when professional life happens to your customers , be sure to have a MiIncome solution in place to help them get back to living it!

Tell me more about MiIncome.

Thanks for reading our article. To learn more about MiIncome, visit our product page and get in touch with us below to discuss how we can help your business put money in your customers’ pockets in their time of need.

Further reading

Life Happens… Protecting Gig Workers from Income Loss

No Income, No Problem! How MiIncome Enables Customer Support During Income Disruption

MIC Global and The Plateau Group Partner with Leap Financial to Deliver Digital Medical Expense Protection in the USA

* 80% of claims turned around within 48 hours, May–Dec 2023.