I’ve seen a lot of people loose their jobs either due to corporate downsizing as some call it or due to the company having new owners. What typically happens in most organizations is that the staffs get paid severance or simply just gets their one month’s salary in lieu. Not enough money to last you 3months without a job.

What if you were to part away with 5% of your salary every month in exchange for say 70% of your monthly salary when you loose your jobs. Would you accept that bargain? I believe not very few will accept the bargain provided everyone participates. This concept is called “Unemployment Insurance” or “Employment Insurance” depending on which nomenclature gives you the most comfort. It involves employees and/or employers contributing respectively a mandatory percentage of the staff salaries as insurance premiums to an insurance company in exchange for Insurance against job losses. So, a staff who contributes part of his salary as premiums will be paid insurance (part or all of his monthly salary) for a year or until he or she finds a new job. This system is practiced in varying forms in a lot of countries like Canada, Germany, Argentina, Japan, Holland to name a few.

Isn’t it time Nigeria practices it too? Currently no such system exist in Nigeria and I certainly think its time considering the spate of job losses and job insecurity that is prevalent in our society. Nothing however stops anyone from trying it out with the insurance companies individually I would think. I certainly will part with a percentage of my salary every month to insure against the risk of not earning an income when I loose my job (God Forbid) provided an Insurance company is willing to take the risk. People these days insure cars, electronics, properties etc, so why not insure your pocket. For example, car owners pay 5% of the values of their car as insurance premiums. Paying 3% or even 6% of your salary every month looks like fair bargain so why not take the chance.

Bua group

RELATED ARTICLESMORE FROM AUTHOR

9 COMMENTS

  6. doh am into one, enlightenment here is paramount becos according to my case study, I found out that most people 4 all that they care especially Nigerian (an average one will tell u say na God dey protect life of which is wrong. its just understanding missing.

  8. Ugo,
    Are there any Nigerian insurance companies who practise this? Sounds like something interesting.
    Also would the premium not be much higher than 3-6%, considering the relative scarcity of jobs in Nigeria, compared to the developed world?

  9. Hi Jide, premium may be much higher or lower depending on where the person buying the insurance works. For example, it will make sense for a staff of say Mobil or a Ministry to pay much lower premiums because job security is higher in such places.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.