What is Unemployment Insurance?

Unemployment insurance is a way for someonewho has lost her job to have a temporary means of income.  It is often referred to simply as “unemployment,” as in “collecting unemployment” or “filing for unemployment.”


While a person is gainfully employed, she has a certain amount of money withheld from her check to be paid toward unemployment insurance.  If this worker becomes unemployed, she can then receive benefits to help with her living expenses while she is looking for another job.

Unemployment benefits do not continue indefinitely, as unemployment insurance is not intended to replace gainful employment, but instead to help the unemployed person get back on her feet.  It is important to file for unemployment insurance immediately upon losing a job, because it is not retroactive. 

Not everyone is eligible for unemployment insurance.  Usually, employees who quit their job are ineligible, as are employees who are fired because of misconduct or damage.  Also, people who are self-employed or who are not citizens cannot collect unemployment insurance.