Job loss insurance not a panacea for impact of economic disruption

EVERY now and then when jobs are threatened, now more so with robotics making some jobs redundant, the idea that Singapore should have wage loss insurance programmes to protect workers from a sudden job loss or retrenchment resurfaces.

Currently, most policies available are accident-related policies, where benefits of monthly income are triggered only in the event of death or permanent disability. Termination of employment due to illness is also covered under some policies.

But pure wage loss insurance is neither offered in Singapore, nor does it look like there's going to be a burgeoning private market to deliver such a safety net. Not that the option was never explored. In fact, the idea was first mooted almost two decades ago. Back in the early 2000s when Singapore's robust economy took a turn for the worse, NTUC Income introduced a retrenchment insurance plan, only to be forced to withdraw it subsequently. The plan was relooked in 2005 in the form of a new insurance scheme that would give people the option of a loan if they got retrenched. After all, without income, it is virtually impossible for anyone to secure a fresh loan. Such an income protection policy can help tide laid-off workers over at …