Luminor launches new insurance to cover unemployment and lasting sickness risks
At the end of January this year, the number of registered unemployed persons in the Baltic countries exceeded 411 thousand, which is 62% more than in the corresponding period of 2020. At the same time, the number of issued sick-leave certificates increased by 49%. To compensate for the drop in personal income in the event of lasting work disability or temporary unemployment, Luminor Bank in cooperation with Gjensidige has developed a new financial solution - Loan Payment Insurance.
In January 2021, compared to the data a year ago, the number of registered unemployed in the Baltic countries increased by almost two thirds. The number of unemployed in Latvia increased by 23%, reaching 72.6 thousand. In Estonia, the increase was 54%, but the number of registered unemployed in Lithuania increased by 79% and reached 282 thousand. In the past, such a high number of unemployed in Lithuania was 10 years ago, in 2011.
At the same time, the number of issued sick-leave certificates continues to increase in all Baltic countries, which has a negative impact on the financial situation of the population. In January 2021, the number of issued sick-leave certificates reached 71 thousand in Latvia, 39 thousand in Estonia and 120 thousand in Lithuania. Compared to the same period last year, the growth is record-high in all three countries, namely 46% in Latvia, 44% in Estonia and 52.5% in Lithuania. In Latvia, in average, every third or 35% of the working age people used sick-leave certificates in 2020, and the total number of sickness days during the year has been 50 days per patient in average. In Lithuania, the sick-leave certificates have been used by 32% of people of working age last year, and there was a 29 days treatment per one patient in the year, in Estonia the sickness level was lower, i.e. only 26% of people of working age used the sick-leave certificates, and 32 days a year are recorded for sick-leave per patient.
“Although unemployment and sickness benefits are provided to employees in the Baltic countries, the benefit is not always sufficient to cover people's regular loan obligations and to meet family needs. In response to the high indicators in terms of both the number of unemployed and the number of sick-leave certificates issued, we have introduced a new insurance product for our customers who have long-term credit liabilities with the Bank. It aims to help keeping your accustomed standard of living if you have to stay on sick leave for more than 30 days, including due to your child illness, as well as in the event of sudden unemployment. When a risk occurs, customers will receive funds to their accounts thus enabling them to use money for existing loan payments to the Bank or other spending. We hope to provide our customers with additional security on their financial situation in long-term,”
- says Armands Jaševs, Luminor Insurance Growth Manager.
Loan Payment Insurance is available to Luminor customers to whom the bank has issued a housing or consumer loan. Depending on the amount of the monthly loan payment, customers can choose one of the insurance covers. For example, if the loan payment is 170 euros, customer can choose the optimal coverage, which provides 200 euros compensation every month for an insurance premium of 7.50 euros per month. An alternative option is to choose the minimal coverage with an insurance premium payment of 4 euros per month and the promised monthly compensation of 100 euros that is paid when any of insured risks occur. Insurance premium payments remain constant throughout the insurance contract, as it is not affected by loan payment fluctuations.