The number of private unemployment insurance policies has boosted to 1.1 million and the total insurance volume has reached 100 million liras.

A total of 11,000 insured people who lost their jobs during the global economic crisis period have obtained the right to benefit from private unemployment insurance.

In the last 18 months, compensation paid to those who benefited from private unemployment insurance totaled 30 million liras, 60 percent of the total amount is used in covering credit card debt and 25 percent is used to make payments on personal loans.

Fifteen percent of people who benefited from private unemployment insurance have obtained the right to take unemployment pay reaching up to 2,500 liras for six months. 

Private unemployment insurance is more common among employees working in the textile, tourism and automotive sectors.

Garanti Bank, the first provider

According to research conducted by Mehtap Özcan from daily Hürriyet, private unemployment insurance, which was first started by a leading Turkish lender, Garanti Bank, has been offered as a service as of May 2008. The insurance provides compensation to people who have been dismissed from their jobs. It can be used for credit card or loan payments. 

Policyholders who had a regular job but were laid off unexpectedly can benefit from the insurance, which does not cover some situations such as company closures, mergers or seasonal jobs.

“As Garanti Bank, we were the first lender to implement private unemployment insurance in May 2008,” according to Erhan Adalı, director general of Garanti Pension.

“The global economic crisis has emerged in an unexpected time. With the economic crisis, the demand explosion followed. The total of premiums, which was 12 million liras at the end of 2008, increased to 73 million liras in 2009,” Adalı said.

Garanti Pension, during the first seven month of this year, has already reached the total figure of last year, Adalı said. “The total number of policyholders of private unemployment insurance boosted to 1.1 million in Turkey. A total of 860,000 are from Garanti Bank. The total figure is expected to reach 1.5 million by the end of this year,” he said.

This insurance implementation brings also some abuses with it. “To prevent abuses, we propose some criteria,” Adalı said. “Statistics and research show us that 30 people out of every 100 people who want to benefit from these insurances do not comply with the criteria in the agreements.”

2,500-lira payment

In revenue security policies, if a policyholder pays a 75-lira monthly premium, then if the person is laid off, he or she will receive 2,500 liras monthly for six months. The total payment reaches 15,000 liras. As the premium payment drops, the wage payment declines, too