Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Wage Insurance Offers Protection

Wage insurance or private unemployment insurance are forms of protection to secure your finances if you lose your job. In a difficult economy, this sort of guarantee can seem especially appealing.

You need to know the difference between the two as one is government coverage and the other is private insurance. Then you need to look at your work, financial and family situation to determine this coverage is a good investment for you.

To discover great policies use the FREE insurance quotes tool and your home ZIP code now!

American workers have experienced many setbacks due to the great recession, and frequent unemployment or reduced wages have been commonplace among workers in previously stable professions. The U.S. Bureau of Labor Statistics reports that as of July 2012, the unemployment rate was 8.3%. This number has greater impact for workers in some economic sectors than others.

Hospitality and Food Service Employment on the Rise

For workers in the professional and business sectors, employment rose slightly; however, transportation and warehousing jobs fell. Employment in the areas of hospitality and food service continued an upward trend, as well as manufacturing, fabricated metal products and machinery.

5.2 million people fall into the long-term unemployed category.

Out of the 8.3% of unemployed Americans, 5.2 million people were among the long-term unemployed and had remained jobless for over 6 months. At 41.3% of the total number of unemployed, the number of workers still looking for jobs made up a little less than half of the unemployed.

Do I Need Wage Insurance

In many states, unemployment benefits are only guaranteed for about six months. If you are among those approximately 5 million jobless people who were laid off or wrongly terminated, you need more protection than what the federal or state government can give you.

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Wage Insurance and Private Unemployment Insurance

The good news is that American citizens can now purchase private unemployment insurance to protect themselves and their families if and when unemployment should strike. You are probably familiar with credit cards that come with unemployment insurance if you lose your job and can’t make the monthly payments, or with car payment plans that allow you return your car to the creditor if you can’t pay. But private unemployment insurance is usually better than this.

Before we discuss the ins and outs of private unemployment insurance, you should be able to differentiate it from wage insurance. Neither is a form of disability coverage, although you can get that too. Under Alternate Trade Adjustment Assistance (ATAA), the United States Department of Labor offers wage insurance to qualified workers.

To qualify for wage insurance you must be over 50, make less than $50,000, and find new work within 6 months.

ATAA workers receive 50% of their lost wages if they take a job that pays less than the one they lost. Workers receive up to $10,000 for up to 104 weeks.

The Details on Private Unemployment Insurance

How Wage Insurance Works

Private unemployment insurance is not administered by the Department of Labor and will actually put money in your pocket in addition to your weekly unemployment benefits.

Sound too good to be true? This insurance really exists, and you can even comparison shop for the best rates.
However, there are two simple guidelines that you need to meet to qualify for the insurance:

  • You need to be approved for unemployment insurance, i.e., be laid off from your job or be able to prove wrongful termination
  • Your annual salary cannot be over $250,000

Since this is insurance, you can’t sign up AFTER you lose your job, so you must:

  • Be employed when you sign up
  • Be a full-time, non-seasonal employee when you lose your job
  • Work for a company that employs more than 50 employees

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Simultaneous Private and State Unemployment Benefits

The private insurance options has a couple of other stipulations. You need to wait 6 months before you file your claim, and the insurance doesn’t make continuous payments beyond the 24 weeks of your unemployment benefits.

In other words, if your unemployment insurance is extended beyond the initial 24 weeks, your private unemployment benefits will stop at that point. However, your private unemployment insurance supplements your unemployment insurance, so you would receive both payments while you are unemployed.

Getting Your Wage Insurance Payment

Many people can meet the private unemployment insurance qualifications and, if you do, the benefits are significant. Your private insurance will pay up to half your previous wages less the amount you are receiving in unemployment benefits from the state.

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Calculating Your Monthly Benefits

The premium on your private unemployment insurance will be between 0.5 and 2 percent of your present salary. However, during unemployment, you don’t pay a penny on you policy. It’s also important to realize, despite the scenario outlined below, that these policies don’t typically provide coverage for a full year. You typically can receive the payments for 24 weeks.

According to the New York Times’ Bucks blog, a common situation could look like this.

Based on a salary of $100,000 per year you could pay around $130 per month for your coverage.

If you lose your job the state of New York would pay out $1,677 per month. Your private insurance coverage would then kick in $2,500. This total of $4177 per month, in theory, is half your salary at $50,000 per year. However, you aren’t actually getting the benefits for a full year.

Calculate Your Wage Insurance Costs

At 24 weeks, you are getting half a year, or a total of $15,000 from the private insurance portion of your payment. Just you need to decide if that monthly payment of $130 was worth it. Remember, if you have had the coverage for a year you would have paid out $1,560 and been paid $15,000.

Of course, you may never need to use this coverage. If you do, the money may allow you to continue to pay on loans, debts and  obligations. This is where a close look at your job and industry is important. Also, premium costs will fluctuate based on the unemployment rate.

When you shop for your private unemployment insurance, you should comparison shop to get an idea of the insurance companies that offer this insurance. This insurance is offered in at least 42 states, and the number of states that have legalized this insurance is growing, so you have a good chance of finding coverage in your state.

Check Your Company’s Claim Recovery Rate

Once you have comparison shopped and selected a couple of insurance providers ask them about their claim recovery rate. This will tell you approximately how many policies to which they have actually paid benefits.

Comparison shopping for your private unemployment insurance will give you the best idea of which company is the best for you.

You will want to look at how each company calculates their premium rates, because each one may calculate that differently depending on how much of a risk they consider your industry to be as far as job loss in concerned.

Recession Proof Your Job

Wage Insurance Gives You Options After Job Loss

Having private unemployment insurance may give you and your family peace of mind. It’s almost like having a savings account to guard you against unexpected losses, except it pays so much more than a simple savings account could ever do. Or like investing in a stock that pays you many times over what you invested.

Find a private insurance company today by comparison shopping for great private unemployment insurance quotes or contact your insurance broker to secure you a great policy in an industry that can finally help ease the stress of today’s fluctuating workplace.

For many people who know they would not have the money to keep their finances or family afloat during a sudden job loss this can bring great peace of mind.

If you are currently working and fear a layoff or downsizing may be near, private unemployment insurance is your best protection. It will remove a great deal of fear, and could be the smartest move you make in today’s uncertain economy.

Use your local ZIP code and the FREE insurance quotes tool to look at policies and benefits now!