Residents of the Canadian province are paying about $50 per month, per person, just in case.
A new form of standalone layoff insurance is increasing in popularity in Alberta, Canada, and this is being seen as a fresh indicator that an economic downturn has made its way into the province.
Thousands of layoffs have already occurred in the province, particularly within the energy industry.
In response, an insurer is hoping to be able to profit and help people at the same time, providing them with both peace of mind and assistance in the form of layoff insurance. The company is called First Foundation and its president, Gordon McCallum, explained that the Edmonton based business is offering this new type of insurance coverage to both salaried and hourly employees. The coverage costs an average $50 for a typical mortgage and provides payments in the case that the policyholder is laid off.
The layoff insurance is having a rising appeal to the residents of Alberta who are seeing economic struggle firsthand.
According to McCallum, “We would prefer it if there was no need for this type of coverage, but the slowing Alberta economy, the low price of oil, and the rising unemployment rate have all led to high demand for this product.”
Should a layoff occur, this non taxable insurance policy provides coverage for six months of mortgage payments, offering some peace of mind to the policyholders who will have half a year to hunt for new employment, train for a new industry, or otherwise find a new path for their lives that will return them to a position in which they can support themselves and make their mortgage payments.
While this type of layoff insurance is sometimes offered by mortgage underwriters, McCallum pointed out that as far as he knows, this protection is not available as a standalone product that is transferrable if the homeowners chooses to switch financial institutions for his or her mortgage. This policy makes it possible for a property owner to move a mortgage to a different financial institution without interrupting the layoff coverage. First Foundation figures show that mortgage default’s most common cause is job loss.