What is Involuntary Unemployment Insurance?

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By: Kim Gallagher

Apr 12, 2020

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3 minute read

Summary

What is Involuntary Unemployment Insurance? Here’s what you need to know about this valuable option.

Involuntary Unemployment Insurance could be good news for your family. You might already have valuable credit insurance to protect yourself and your family from the financial fallout of a changing economy. If you closed a personal loan, you might have bought credit insurance and just need to know how to put it to work for you. Or, you might be considering taking out a personal loan and wondering whether insurance is a smart move. Here’s what you need to know about this valuable option.

Credit Involuntary Unemployment Insurance (IUI) makes payments on your credit obligations when you have lost your full-time job through no fault of your own. Examples of “involuntary unemployment” include a layoff, general strike, involuntary termination of employment, unionized labor dispute or a lockout. What you’re buying is peace of mind for payments on your personal loan — and safekeeping of your credit rating.

How does IUI work? IUI benefits, as long as you qualify, pay up to a pre-determined maximum number of monthly payments on your loan if you become involuntarily unemployed. You must buy the insurance in conjunction with a loan, and your originally scheduled monthly loan payment will be applied to the loan when a claim is filed. This meaningful benefit frees you up to use money from your severance pay or unemployment benefits to handle other household necessities – and eases the burden.

Do I qualify? To qualify to purchase IUI in most states, you have to be employed and working 30 hours per week. Self-employed people, including independent contractors, are not eligible to purchase coverage (in most states). You must qualify for state unemployment payments to receive this benefit (in most states). Check your eligibility here, but be sure to consult with your representative or agent about other requirements and exclusions.

I already have an IUI policy. How do I file a claim? It only takes a moment to confirm whether you bought this insurance when you closed your loan. Get in touch with your loan provider to confirm the details of an IUI policy you might already have purchased and they will provide you with an IUI Claim Form or you can find a form here.

OneMain remains committed to providing you with resources that help you make informed financial decisions. OneMain has compiled a list of government resources to help you find relief, if you have been impacted by COVID-19. Visit OMF.com/HereToHelp.

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This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.

Frequently asked questions

Here are a few things that affect your eligibility

  • Financial history Credit history
  • Income and expenses
  • Loan purpose
  • Whether you have filed for bankruptcy
  • State of residence

Before you close your loan, OneMain will need the following documents from you:

  • A copy of a valid, government-issued ID (driver’s license or passport)
  • Your Social Security card
  • Proof of residence (driver’s license with current address, utility bill, or signed lease)
  • Proof of income (pay stubs or tax returns)

We may ask for more info based on your unique situation. Take the next step and start your loan application today

  • From the start of the application to receiving the funds could be as quick as one day.*
  • Completing the online loan application: Takes just minutes to complete and see your offers*
  • Signing your loan documents: After final loan approval, signing your closing documents takes about 30-45 minutes.
  • Receiving your funds: When using your debit card to receive funds, you can get your money as soon as an hour after signing the loan docs.1 Funds can also be paid out by direct deposit (ACH), which are available approximately 1-2 banking days after loan closing. A check can be issued as soon as the same day as the closing.

*Timing may vary based on: when you submit your application, how many documents are needed for approval, and how long it takes for OneMain to receive, review, and verify those documents, and whether your loan is secured by collateral, among other factors.

Are you still wondering "Is a personal loan right for me?" Don't worry – we're here to help. Just call (800) 961-5577 or find a branch near you.

If you're approved for a loan, you may see secured or unsecured next to your offer. A secured loan requires that you provide collateral, like a vehicle. An unsecured loan doesn't require any collateral from you.

Keep in mind that there are eligibility requirements such as the condition and age of your motor vehicle and proof of insurance. Also, if a borrower defaults on a secured loan, the lender has the right to take the collateral.