Definition of Unemployment Insurance

Unemployment insurance is a joint programcalculated by your previous earnings. It is not
funded through both the federal government andbased on your needs. Different states apply
the states. If you have ever been fired from adifferent formulas but your unemployment
job you are likely eligible for unemploymentinsurance will be in line with your previous income.
insurance. The amount you can claim and theThere are some disadvantages to unemployment
amount of time you can claim varies dependinginsurance. Sometimes you have to make a
on the state you live in. Unemployment insurancejudgment decision on accepting a new job. You
or compensation is designed to help workers whocan accept a new job for less money. As soon as
become employed continue to meet their financialyou accept the new job your unemployment
obligations until they find another job.benefits stop. However, if you do not accept the
The advantages to having unemploymentnew job you will be putting yourself at risk.
insurance is to help unemployed workers meetUnemployment can only be claimed for a limited
their financial obligations and to help sustain localperiod of time. Depending on where you live it
communities. If a larger portion of a workforce iscould be 6 months to a year. So as you can see
laid off or fired small towns and communitiesyou could be risking a future income.
suffer also. Not only does regular wages pay billsWith the help of state and federal funding you are
and mortgages they also purchase goods andlikely entitled to unemployment insurance
services. When wages paid to the workforcecompensation if you have been laid off or fired
suddenly stop the local economy can suffer. Youfrom a job. Unemployed workers can receive
are allowed to spend the money frompayment until they find another job. This not only
unemployment insurance on what you choose.helps the unemployed but also the local
There are no rules forcing you to pay yourcommunity. Check into the unemployment
essentials first. This helps some of the money tocompensation laws in your area if you have been
reach the local economy.let go from a job. You may be entitled to a large
Unemployment insurance or compensation isamount of economic relief.