Loss of job insurance

[kocak]

I've never heard of this before. Employees are allowed to buy insurance that will pay their salary if they lose their job.

Is this type of insurance allowed to be paid with pre-tax dollars in a cafeteria plan?

Does it make a difference if the plan sponsor is a prison? I'm not sure if the prison is privately run or government.

Thanks.

Michele

[Lisa Hand]

The only types of insurance permitted through a Cafeteria Plan are health related and group term life up to the limitation of section 79. While I am not familar with this type of insurance and would suggest extreme caution (if it sounds too good to be true, it probably is), no vehicle which deferes compensation is permitted in Cafeteria Plan.

[mroberts]

This sounds a little shady. If someone had this insurance, wouldn't it be conceivable that they would go out of his or her way to get fired? Not that the person would do something that would be considered gross misconduct like start the buidling on fire or punch someone, but what would stop a person from coming in and paying on the Internet all day until he or she got fired?

[kocak]

I don't have a lot of details on this type of insurance "Job Protection Income". I was thinking it sounded like the type of insurance you can get to pay off your mortgage if you die, etc. There are probably stipulations, whereby the policy will not pay in all circumstances.

Good to know that I can't run the premiums through the cafeteria plan. Thank you.