Markets in Everything: Private Job Loss Insurance
Income Assure is a private insurance company that sells supplemental unemployment insurance so that you can maintain 50% of your income if you lose your job. The company covers the difference between 50% of your monthly income and what your state pays for unemployment compensation. Monthly premiums vary by state, occupation and income level, here are some examples for workers in the state of Maryland with an annual salary of $60,000:
Construction: $62.20 per month
Leisure and Hospitality: $39.73
Manufacturing, Durable Goods: $37.35
Financial Activities: $20.17
Education and Healthcare Services: $15.05
Public Administration: $12.23
Obviously, the monthly premiums are risk-adjusted by industry based on the chances that workers will lose their jobs, with construction workers having a much greater chance of unemployment (and a much higher monthly premium) than public administration (translation = government job).
HT: Peter Krieger
4 Comments:
Been thinking about this for years, finally glad to see a real example.
A guy could really clean up selling job loss insurance to federal employees.
Real world data highlighting the relative likelihood of losing one's job in education or gov't absent one's final demise!
Back in the early 1900s, there was private unemployment insurance provided by some unions and fraternal orders, but they were unable to diversify by industry and geography. Some life insurance companies were interested in providing coverage, but state insurance commissioners uniformly prohibited it, saying that it was inherently unsafe to the insurance company, which would not be able to pay its claims.
One company lobbied the New York legislature to pass a bill allowing them to provide provide unemployment insurance. The law passed, but was vetoed by Governor Franklin Roosevelt. Yes, that Franklin Roosevelt, who would later take credit for socialized unemployment insurance. Seems that FDR didn't want the private sector interfering with what he thought the public sector should provide.
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