Layoff Insurance for Vacations

Insurance Covers Travel Expense If Trip is Cancelled Due to Job Loss

May 11, 2009

Planning an expensive vacation despite troubled times? Layoff insurance allows travelers to cancel a trip a no cost if they are laid off, relocated, or lose a job.

Vacations are one of the most expensive items the average family spends money on, third after the house and the family car. In uncertain economic times, it makes sense to insure travel plans against the chance of losing a job. Layoff insurance is a new type of travel protection that guarantees a refund if a traveler is laid off before the big vacation.

Layoff Insurance or Job Loss Travel Insurance

Also known as "job loss insurance," layoff insurance usually appears as a clause in a travel insurance plan. It protects a traveler by ensuring that, should she be laid off before the holiday, she'll be able to receive a full refund of the cost of the trip. Layoff insurance was newly introduced by a number of insurance companies in 2008 and increasing numbers of customers are asking for insurance quotes on plans that offer layoff insurance.

Who Needs Layoff Insurance?

In troubled times, cruise companies and airlines are slashing prices to entice weary consumers to consider a vacation away from their daily grind, and high stress levels and the bleak world outlook can make a trip an enticing prospect. Job security seems less than ever, though, so it only makes sense to protect the investment of an expensive trip.

According to radio personality John Tesh, anyone who works for a company that may be downsizing or who feels his job security might be at risk is in a good position to consider layoff insurance on his next vacation, especially if it's a costly one, like a cruise or a safari. But if the company is downsizing and a boss looks unhappy at a request for time off, it might be a better idea to stay put and postpone the trip altogether to hang on to that job.

Cost of Layoff Insurance for a Trip

The cost of job loss travel insurance will depend on several factors, like the job sector, how long the person seeking an insurance quote has held the job, and where the trip is planned for. On average, says Jim Grace, CEO of travel insurance agency InsureMyTrip.com, layoff insurance should cost about 4 to 8 per cent of the cost of the trip- a small expense that can pay off in big ways if you have to cancel.

Layoff travel insurance will cost the most for those who work in the auto industry or people with relatively new job positions. In cases where it's not possible to get job loss coverage, some insurance plans have a policy that allows a trip to be canceled for any reason. But NRP warns that these can be more expensive and may only cover a portion of the vacation's price tag.

Other types of insurance allow a trip to be canceled if a job is relocated or other work-related changes take place; but most of these won't cover layoffs, so it's a good idea to read the fine print and know exactly what that policy says.

Sources

The copyright of the article Layoff Insurance for Vacations in Insurance is owned by Victoria Anisman-Reiner. Permission to republish Layoff Insurance for Vacations in print or online must be granted by the author in writing.