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Insurance pays the mortgage after a layoff
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Should you buy job-loss mortgage insurance?
By Holden
Lewis . Bankrate.com
Mortgage borrowers can buy insurance that takes
over the house payments after a job layoff.
Even in times of high unemployment, it's not for everyone.
People with job security or homeowners who have saved an emergency
fund can probably pass on it. Ditto for homeowners who believe they
can get through hard times with a little understanding from their
mortgage lender.
But if you lie awake at night, counting worries instead
of sheep, mortgage unemployment insurance could be worth the money.
How it works
Mortgage unemployment insurance recently became widely available
and is sold through at least two companies: Assurant Group and Mortgage
Payment Protection Inc.
Now that the refinancing boom has coincided with rising
unemployment, these insurance companies expect to see increased
business.
Customers get mortgage unemployment policies at loan
closing or soon after, whether they're buying a house or refinancing.
Most policies are sold through lenders and builders, although individuals
can buy policies, too.
Story continues below
A policy pays the borrower's mortgage for up to six
months of "involuntary unemployment." That covers layoffs
resulting from economic downturns. It doesn't cover a policyholder
who quits, goes on strike, or who is fired for misconduct or dishonesty.
It doesn't cover self-employed people, retirees, people on disability
or employees of businesses that shut down routinely -- summer resorts
that close for the winter, for example.
The most widely available policy, called MortgageGuardian,
is issued in all states through Mortgage
Payment Protection Inc. It pays up to $2,500 a month. Coverage
kicks in after one month of unemployment.
The initial cost to start a policy varies, but continuing
coverage costs 4 percent of the mortgage payment. If your monthly
payment is $1,500 a month, MortgageGuardian would cost $60 a month.
That's equivalent to making an extra mortgage payment every 25 months.
When you get this kind of coverage, you're placing
a bet that for every two years you pay the premium, you'll be unemployed
for more than one month. Remember, the policy begins paying after
a full month of unemployment, not immediately upon loss of a job.
Unless you fall behind, you'll have to make one mortgage payment
while unemployed before the policy begins paying out.
Ready
to find a mortgage? Check
rates in your area.
Let's say you have a $1,500 monthly mortgage payment
and you pay your $60 premium every month for five years, then lose
your job and remain unemployed for three months. In five years you
paid $3,600 in premiums, and during your unemployment the insurance
company makes $3,000 in mortgage payments.
But if you're unemployed for four months instead
of three, the insurance company makes $4,500 in mortgage payments
-- more than you paid out in premiums.
Six-month solution
Does it make sense to spend your money on mortgage unemployment
insurance? Probably not, if you follow the advice of financial planners
who tell you to save six months' worth of living expenses in an
emergency fund.
A six-month cushion is pretty substantial, which
is to say that it's awfully difficult to save that kind of money,
especially if you recently spent most of your savings on a down
payment and closing expenses to buy a house.
Mortgage lenders realize that many of their customers
don't have a big reservoir of cash. They usually will work with
unemployed borrowers.
"The last thing they want is the family's
house or car," says James M. Knaus, a financial planner in
Troy, Mich. "They lose a lot more money going after people
and foreclosing on a mortgage. That's an expensive process."
The biggest mortgage servicing companies -- the firms
that you send your payments to -- have entire departments that devote
themselves to working with customers in financial difficulty. They
work out deals with borrowers to accept partial payments or even
to suspend payments for a few months of unemployment. Later, they'll
adjust the monthly payment amounts to get their customers back on
track.
Of course, these services cost money, so it's not
too surprising to discover that mortgage unemployment insurers target
their pitches to mortgage servicing companies as well as to borrowers.
"When that borrower calls a mortgage servicer
and says, 'I just lost my job, so I can't make my mortgage but I
have mortgage payment insurance,' that servicer is relieved,"
says Teri Cooper, business development director for MortgageGuardian.
Assess worth
If mortgage unemployment insurance benefits lenders as much as borrowers,
you might wonder why borrowers bear the full cost. The answer is
that the insurance mostly buys peace of mind, and that's a bottom-line
issue for people, not for businesses.
Knaus says he doesn't get many questions about mortgage
unemployment insurance. He practices in the Detroit area, where
layoffs are common. Unions there negotiate benefits that soften
the impact of layoffs.
Workers in other industries might not be as fortunate,
Knaus says, "in which case people should assess the likelihood
of a layoff in their own situation, and if there's a strong or moderate
possibility of a layoff, it may make sense to do a calculation"
to decide if this type of insurance coverage is worth it.
-- Posted: Nov. 8, 2001
See Also
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Results from search: http://www.goodincomeprotection.co.uk/
Mortgage payment protection insurance. Income protection insurance against redundancy and unemployment
Results from search: http://www.mortgage-protection-insurance-uk.co.uk/
Mortgage Protection Insurance UK - Online protection Insurance
Mortgage
Protection Insurance UK. Mortgage Payment Protection for UK residents.
MAKING
A CLAIM - WHEN ONE IS EXCLUDED UNEMPLOYMENT
- WHEN ONE IS EXCLUDED DISABILITY
- MORTGAGE PROTECTION INSURANCE QUOTE & APPLICATION
FORM FOR UK RESIDENTS - CONTACT US
Welcome to the UK
Mortgage Protection Insurance Online site. This site specialises in mortgage
payment protection insurance policies in the UK that cover an individual
as a result of loss of earnings caused by unemployment, redundancy, sickness
or disability. 90 families a day had their homes repossessed in the year
2000, which was many as a result of financial problems associated with
unemployment. Statistically, every adult in Britain is five times more
likely to suffer a serious disability than die before the age of 60.
CLICK
HERE FOR INSTANT QUOTES AND PRICES ONLINE
3 MONTHS FREE COVER FOR MORTGAGE LENDERS!!
CLICK
HERE TO GO DIRECTLY TO THE APPLICATION FORM
IF
YOU ARE LOOKING FOR A MORTGAGE LIFE INSURANCE POLICY
CLICK
HERE FOR AN INSTANT QUOTE VIA MONEYQUEST
This mortgage payment
protection insurance policy is named "SecurityFirst" and is
provided through Goodfellows - underwritten by certain underwriters at
Lloyd's and administered by Paymentshield Limited UK.
Person's eligible
for this mortgage payment protection insurance cover are as follows:
1. You must be aged
18 or over and under 65 and be permanently resident in the United Kingdom,
Channel Islands or Isle of Man.
2. You must be in work (work means actively working in the United Kingdom,
Channel Islands or Isle of Man for a minimum of 16 hours per week).
3. You must have a mortgage on private residential property you occupy
as your home.
4. You must complete the application form and direct debit mandate and
agree to be bound by the policy terms and conditions.
5. You must not know that you will become unemployed or have any reason
to believe that you may become unemployed.
6. You must not be employed on a casual, temporary or seasonal basis (including
casual, temporary or seasonal contracts), or in any type of occupation
where unemployment is a regular feature of that particular job.
You will need to be
continuously unemployed or disabled for a period of either 30 or 60 consecutive
days before you are able to claim benefit under this policy.
You can receive monthly
benefit for up to 12 months for each separate period of unemployment or
disability.
If you do not need
unemployment and disability cover, you can restrict your insurance to
either unemployment only cover or disability only cover. If you do restrict
your cover, you must be sure that you can meet your mortgage payments
whilst you are unable to work.
CLICK
HERE FOR INSTANT QUOTES AND PRICES ONLINE
The maximum monthly benefit you are allowed to insure under this policy
is £1500 or 65% of your normal income, whichever is the lower (larger sums
insured may be available upon request).
Results from search: http://mortgage-protection-insurance.123-insure.co.uk/
Mortgage Protection Insurance UK - 123-INSURE mortgage protection insurance
UK mortgage protection insurance online.
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SITES
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US - ONLINE
UK MORTGAGE SITES
Affordable UK Mortgage & Income
Protection Insurance
Welcome to the Mortgage
Protection Insurance Online Site. This site has been developed to help one
understand what Mortgage Protection is all about. Further to this 123-Insure.co.uk
has partnered with Pinnacle
Insurance plc and "SecurityFirst"
(a policy provided through Goodfellows - underwritten by certain underwriters
at Lloyd's and administered by Paymentshield Limited UK) who provide mortgage
protection insurance at extremely competitive rates. The quotation system
is interactive and online. If
one requires life insurance to cover a home loan, please select this option
below. Further to this, individuals wishing to obtain income protection only,
should follow the link indicated below - this cover is also available to persons
not owning their own homes.
CLICK
HERE TO OBTAIN AN ONLINE QUOTE ON MORTGAGE PAYMENT PROTECTION FROM GOODFELOWS
(In partnership with Goodfellows)
CLICK
HERE TO OBTAIN AN ONLINE QUOTE ON MORTGAGE PAYMENT PROTECTION FROM PINACLE
(In partnership with Pinnacle)
CLICK
HERE TO APPLY FOR MORTGAGE PROTECTION WITH LIFE INSURANCE
(In partnership with the Idol)
CLICK
HERE FOR INCOME PROTECTION (UNEMPLOYMENT, REDUNDANCY, SICKNESS & DISABILITY
COVER - ALSO AVAILABLE TO PERSONS NOT OWNING A PROPERTY)
(In partnership with Goodfellows)
ONLINE
UK MORTGAGE SITES
With
Pinnacle Insurance
plc the cover offered is from as little as 63P a
week for each £100 of benefit. This benefit is available to both new
and existing borrowers and may be transferred between properties and between
mortgage lenders.
There are 3 levels
of protection on which you are free to choice the type and monthly benefit
you would receive The types of cover include:
Accident, Sickness
and unemployment cover.
Accident and Sickness cover.
Unemployment cover only.
CLICK
HERE TO OBTAIN AN ONLINE QUOTE
This policy from Pinnacle
gives the insured the first three months of cover
absolutely free. This may really help those who are setting up homes for
the very first time.
On unemployment cover
it is important to note that there is a qualifying period. This is 30 days
for new borrowers and 90 days for existing borrowers.
Once the cover becomes
active there is a choice of "wait" periods that may be taken.
The standard is 30 days - this means that one would normally wait 30 days
from the date one is first ill, disabled or unemployed before receiving
any benefits. Should one opt for a longer a period, the price of the policy
is reduced accordingly.
Areas covered include:
England:
Avon
Bedfordshire Berkshire Buckinghamshire
Cambridgeshire Cheshire Cleveland Cornwall County Durham Cumbria Derbyshire
Devon Dorset Essex East Riding of Yorkshire East Sussex Gloucestershire
Hampshire Herefordshire Hertfordshire Isle of Wight
Kent Lancashire Leicestershire Lincolnshire London Manchester Merseyside
Middlesex Norfolk Northamptonshire North Lincolnshire Northumberland Nottinghamshire
North Yorkshire Oxfordshire Rutland Shropshire Somerset
South Yorkshire Staffordshire Suffolk Surrey Tyne & Wear Warwickshire
West Midlands West Sussex West Yorkshire Wiltshire Worcestershire
Scotland:
Edinburgh
Glasgow The Western Isles The Shetland Islands The Orkney Islands Borders
Central Dumfries & Galloway Fife Grampian Highlands Lothian Strathclyde
Tayside
Wales:
Clwyd
Dyfed Gwent
Major
Centres:
Aberdeen Bath Blackpool Bournemouth Brighton Bristol Buxton Cambridge Cardiff
Chester Coventry Derby Dover Dundee Durham Eastbourne Edinburgh Exeter Folkestone
Gloucester Harrogate Hastings Hereford Inverness Kingston upon Hull Leicester
Lincoln London Norwich Nottingham Oxford Perth Plymouth Portsmouth Reading
Salisbury Scarborough Southampton Stoke-on-Trent Stratford Swansea Torquay
Weston-Super-Mare Winchester Windsor Worcester York
CLICK
HERE for 123 INSURE UK INSURANCE GUIDE
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Results from search: http://www.portwood.co.uk/information-unemployment-insurance.htm
Online unemployment insurance - mortgage payment protection insurance
UK unemployment insurance -mortgage
payment protection
We offer three policies which offer unemployment
insurance (and disability).
SHELTER : Offers cover against unemployment
and disability. You can protect up to £2,500 per month or 75% of
your income and are not restricted to mortgage payments. There is
a 30 day excess and you have a choice of 12 or 24 month payment
benefits. Rates start from £2.50 per month per £100 sum insured
for redundancy cover only.
SECURITYFIRST : Offers cover up to £1,500 or
65% of your income - the policy is restricted to mortgage related
payments (interest, means of repaying capital and house buildings/
contents. You have 12 months protection and a choice of 30 or 60
day excess. If you are taking out a new mortgage or transferring
schemes you also obtain 3 MONTHS FREE cover. rates start from as
low as £3.65 per month per £100 sum insured for combined cover.
BIBA: Another policy not restricted to
mortgage payments. You can cover up to £1,500 or 50% of your
salary. This policy has a wide range of excess periods (30, 60,
90, 180 days) and benefit periods (9, 12, 18, or 24 months). If
you only want to insure against a short period being unable to
work, or have resources to cover a long period before claiming
this is the cheapest policy.
NB. Please note the following information which
applies generally to these forms of policies.
Initial exclusion period - This starts from
the date the policy was set up and excludes unemployment claims
during an initial period. e.g. If you took out a policy on March
1st 2002 and the policy had a 30 day initial exclusion period you
would not be covered if you were advised you would lose your job
before 31st March 2001. SHELTER has a 60 day initial exclusion
period - reduced to 30 for new mortgages and removed completely
for transfers. SECURITYFIRST has NO initial exclusion period for
transfers or new mortgages but 3 months if you already have a
mortgage.
Excess period. The excess period does NOT
necessarily begin the day you become unemployed. If you are paid
cash-in-lieu the excess period will begin when the unemployment
notice period expires.
Unemployment insurance benefits tend to be
paid 30 days in arrears.
For
further details of the SHELTER unemployment and disability
insurance contract - Click Here
For
details of the SECURITYFIRST mortgage payment protection insurance
policy - Click Here
For details
of the BIBA contract - Click Here
For our Home
Page with details of many other insurance policies - Click Here
About B. Portwood & Co Ltd
We are Insurance Brokers founded in
1963 and currently have 3 offices in Gateshead, Bishop Auckland and
Consett - all in North East England. Previously we were regulated by the
IBRC but on repeal of the IBRA are currently regulated by GISC (this
will change in2004 as the FSA take over!). We are also members of the
IIB and BIBA (Click the appropriate logo for their web-sites). As
brokers we have always strived to advise our customers on the best value
for money policies and to act in your best interests.
Important
All information on this website has been
provided in good faith. Although every effort has been made to ensure its
correctness errors may have been made or policy information out of date.
If as an insurer you find errors or wish us
to change information/ add/ remove policies please contact us on 01388
607105.
All information on this website has
indicative status only and no liability can be accepted for any use made of it.
Any quotations you obtain must and will be confirmed by us before cover can be
issued. As required by GISC we will advise you of main policy cover, terms and
conditions if such information is not already on our site.
You are reminded of your obligation to
inform underwriters of all material facts when obtaining a quotation before
going on cover. A material fact is one which could affect the policy in any way.
If you are in doubt whether a fact is material it should be disclosed as we
accept no liability should a policy be voided or terms amended due to non
disclosure.
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Results from search: http://www.portwood.co.uk/information-unemployment-insurance-ASU.htm
unemployment insurance for uk nationals
Unemployment insurance - UK only
Why you need it
90 families a day had their homes repossessed in 2000. The
majority due to the financial problems with unemployment
One in three people aged between 25 - 34 have experienced
unemployment for a period in excess of one month
Almost one in five working age households (3.4 million)
have someone who is currently unemployed
Every day 500 people in the UK become unemployed. 60% of
unemployed men and 45% of unemployed women will be out of work for 6 months
or more
Every adult in Britain is five times more likely to suffer
a serious disability than die before the age of 60
Today in Britain, 2,900 people will start claiming State
disability benefits
1,800,000 people in Britain are already disabled and have
been unable to work for 12 months or more
The State benefit for a single person are currently
(1.3.2001) under £60 per week.
The State Benefit for two adults and two children is
£96.00 per week
Since October 1995 new mortgage borrowers receive no state
help for the first 9 months of unemployment or disability. Existing mortgage
borrowers receive nothing for the first two months, 50% for the next four
months and then full benefit for mortgages up to £100,000 providing they
qualify for income support. The Government estimate that 70% of mortgage
borrowers will not get income support due to savings, income or a working
spouse or partner.
In 1998 the introduction of new incapacity criteria
resulted in 102,000 claimants being turned down for any state benefit. An
independent doctor will carry out the assessment and you must be incapable
of doing any work, not just your normal job, to qualify for state
benefit.
How this policy can help you
You do NOT need to have a mortgage to be insured. However
it will cover your monthly mortgage payment, rent, loans, household bills
etc
Free transfer and immediate cover for existing
policyholders
Highly competitive premiums paid by monthly direct debit at
no extra cost
Each applicant can select up to £2,500 per month benefit
Only a 30 day excess period
Benefits payable for either 12 or 24 months
Choose either unemployment, or disability or combined
The self-employed, directors and proprietors of businesses
are covered if their business ceases to trade
Tax free benefits
No loading on the basis of age, gender, occupation or
smoking habits
Wide acceptance criteria
For our
new uk unemployment insurance contract offering cover up to £2,500 per
month with a 30 day excess period and low initial exclusion period - Click
Here (Accident/ Disability also covered)
For our uk unemployment
insurance contract offering a wide range of initial excess periods (with
reduced rates) and a wide range of benefit periods - Click Here (Accident/
Disability also covered)
To browse both
options Click here
For our home page with a
wide range of other contracts Click Here
Results from search: http://www.a-uk-unemployment-insurance-website.co.uk/
Unemployment Insurance UK Redundancy Job Loss Free Online Quotes Companies
A UK Unemployment Insurance Website
Unemployment insurance is available via this
website either as standalone no-frills unemployment insurance
or as part of a more comprehensive accident, sickness and
unemployment policy. UK residents can request free online
quotes and even apply online via our secure server. Accident,
sickness and unemployment insurance gives you the peace of
mind that your ability to meet your outgoings is protected
against redundancy or an inability to work due to disability.
This product available on this site is branded as SHELTER®.
Getting ASU cover is easy on this site - just
take a short time to get a quote, then fill in your details
and submit the online application form. You can also download
an application to print out post by clicking 'Quotes' on the
upper right of this page and following the instructions on
that page.
The online application form is protected with
Verisign 128bit (SSL) encryption. This means that all your
personal details are secure and no third party is able to
intercept and read your communications. You can cancel the
application at any time by simply closing the application
form window. No details will be transfered until you have
completed all sections of the form and pressed the Submit
button.
The premium rates per £100 of monthly cover (including
IPT where applicable) are detailed below:
Type of cover
Benefit period
Rate per
£100 cover
Unemployment only
12 months
£2.50
Unemployment only
24 months
£3.00
Disability only
12 months
£2.50
Disability only
24 months
£3.00
Unemployment and Disability
12 months
£4.50
Unemployment and Disability
24 months
£5.00
SHELTER® has been designed to provide the following
benefits:
You do not need to have a mortgage to be insured
under SHELTER®. However, being totally flexible it can cover
a monthly mortgage payment, or rent, loans, household bills
or any other purpose you require.
Free transfer and immediate cover for clients who switch
from another insurer.
Highly competitive premiums payable monthly by Direct
Debit.
Each applicant can select up to £2,500 per month of benefit.
The excess period is only 30 days.
The self-employed, directors and proprietors of businesses
are covered if their business ceases to trade.
Tax free benefits.
No premium loading on the basis of age, gender, occupation
or smoking habits.
The quotes on this site are brought to you
by The Goodfellows Group, which is a member of (BIBA) British
Insurance Brokers' Association, CIFMA, and (GISC) General
Insurance Standards Council.
Click the links in the panel on the upper
right hand side of this page to get a quote or to find out
more about the companies that are working together to provide
this service.
NB: To use the quotation system,
you must have at least a version 4 Netscape or IE browser.
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Bank Rate Monitor -- Should you buy job-loss mortgage insurance? - MSN Money
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Should you buy job-loss mortgage insurance?
So you're not one of those people who's set aside a cushy 6-month emergency fund. Ask yourself whether a pink slip is in the realm of possibility.
By Bankrate.com
Mortgage borrowers can buy insurance that takes over the house payments after a job layoff. Even in times of high unemployment, it's not for everyone. People with job security or homeowners who have saved an emergency fund can probably pass on it. Ditto for homeowners who believe they can get through hard times with a little understanding from their mortgage lender. Rates are still cheap. One home-loan application. Up to 4 loan offers.
But if you lie awake at night, counting worries instead of sheep, mortgage unemployment insurance could be worth the money.
How it works
Mortgage unemployment insurance recently became widely available and is sold through at least two companies: Assurant Group and Mortgage Payment Protection.
Now that the refinancing boom has coincided with rising unemployment, these insurance companies expect to see increased business.
Customers get mortgage unemployment policies at loan closing or soon after, whether they're buying a house or refinancing. Most policies are sold through lenders and builders, although individuals can buy policies, too.
A policy pays the borrower's mortgage for up to six months of "involuntary unemployment." That covers layoffs resulting from economic downturns. It doesn't cover a policyholder who quits, goes on strike, or who is fired for misconduct or dishonesty. It doesn't cover self-employed people, retirees, people on disability or employees of businesses that shut down routinely -- summer resorts that close for the winter, for example.
The most widely available policy, called MortgageGuardian, is issued in all states through Mortgage Payment Protection (see link at left). It pays up to $2,500 a month. Coverage kicks in after one month of unemployment.
The initial cost to start a policy varies, but continuing coverage costs 4% of the mortgage payment. If your monthly payment were $1,500 a month, MortgageGuardian would cost $60 a month. That's equivalent to making an extra mortgage payment every 25 months.
When you get this kind of coverage, you're placing a bet that for every two years you pay the premium, you'll be unemployed for more than one month. Remember, the policy begins paying after a full month of unemployment, not immediately upon loss of a job. Unless you fall behind, you'll have to make one mortgage payment while unemployed before the policy begins paying out.
Let's say you have a $1,500 monthly mortgage payment and you pay your $60 premium every month for five years, then lose your job and remain unemployed for three months. In five years you paid $3,600 in premiums, and during your unemployment the insurance company makes $3,000 in mortgage payments.
But if you're unemployed for four months instead of three, the insurance company makes $4,500 in mortgage payments -- more than you paid out in premiums.
Six-month solution
Does it make sense to spend your money on mortgage unemployment insurance? Probably not, if you follow the advice of financial planners who tell you to save six months' worth of living expenses in an emergency fund.
A six-month cushion is pretty substantial, which is to say that it's awfully difficult to save that kind of money, especially if you recently spent most of your savings on a down payment and closing expenses to buy a house.
Mortgage lenders realize that many of their customers don't have a big reservoir of cash. They usually will work with unemployed borrowers.
"The last thing they want is the family's house or car," says James M. Knaus, a financial planner in Troy, Mich. "They lose a lot more money going after people and foreclosing on a mortgage. That's an expensive process."
The biggest mortgage-servicing companies -- the firms that you send your payments to -- have entire departments that devote themselves to working with customers in financial difficulty. They work out deals with borrowers to accept partial payments or even to suspend payments for a few months of unemployment. Later, they'll adjust the monthly payment amounts to get their customers back on track.
Of course, these services cost money, so it's not too surprising to discover that mortgage unemployment insurers target their pitches to mortgage-servicing companies as well as to borrowers.
"When that borrower calls a mortgage servicer and says, 'I just lost my job, so I can't make my mortgage but I have mortgage payment insurance,' that servicer is relieved," says Teri Cooper, business development director for MortgageGuardian.
Likelihood of a layoff? Try to assess it
If mortgage unemployment insurance benefits lenders as much as borrowers, you might wonder why borrowers bear the full cost. The answer is that the insurance mostly buys peace of mind, and that's a bottom-line issue for people, not for businesses.
Knaus says he doesn't get many questions about mortgage unemployment insurance. He practices in the Detroit area, where layoffs are common. Unions there negotiate benefits that soften the impact of layoffs.
Workers in other industries might not be as fortunate, Knaus says, "in which case people should assess the likelihood of a layoff in their own situation, and if there's a strong or moderate possibility of a layoff, it may make sense to do a calculation" to decide if this type of insurance coverage is worth it.
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