What Is Unemployment Insurance?

What Is Unemployment Insurance?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

Unemployment Insurance is a government program that offers financial assistance to eligible workers who’ve lost their jobs. Often funded through taxes paid by employers, this form of insurance provides temporary, partial wage replacement to unemployed individuals who are actively looking for new employment.

Related Questions

1. Who qualifies for Unemployment Insurance?

Typically, individuals who are let go from a job through no fault of their own are eligible for Unemployment Insurance. They should also meet their state’s requirements for wages earned or time worked during an established period referred to as a “base period”.

2. How long can one receive Unemployment Insurance?

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Unemployment benefits typically last for about 26 weeks, though this length can vary from state to state. During high unemployment periods, additional weeks of benefits may be available.

3. What’s the application process for Unemployment Insurance like?

The application process usually involves contacting your state’s unemployment insurance agency, which can typically be done online, by phone, or in-person. You will need to provide information like your full name, contact details, Social Security Number, and employment history.

4. How are Unemployment Insurance benefits calculated?

Each state has a formula to determine benefits. Generally, it’s a percentage of your earnings over a recent 52-week period up to a state maximum amount.

5. Can self-employed individuals apply for Unemployment Insurance?

Typically, self-employed individuals are not eligible. However, special provisions currently allow self-employed people and gig workers to be eligible due to the COVID-19 pandemic.