You know things are in a pretty parlous state when even government ministers concede that “this is the worst recession for over a hundred years”. It might not do much to change the global economic outlook, but for the individual at least there is the possibility of taking comfort from the fact that today’s financial armoury of self-defence includes unemployment cover that was simply not available more than one hundred years ago.

It was one of the Prime Minister’s closest political allies, Education Secretary Ed Balls, who uttered the now famous remark that likened the current economic collapse to that of the Great Depression in the 1930s. His comment was widely reported by the national press, including The Independent newspaper on the 10th of February 2009. Since that date, a number of authoritative sources have confirmed that the overall level of unemployment, which currently stands at some two million, will grow to more than three million – just over one in ten of the work force – before the end of next year.

So, where lies the crumb of comfort for the hard-working individual in Britain today, compared with his counterpart in the 1930s? It can reasonably be argued that it lies in the possibly unlikely shape of unemployment cover that is available nowadays. This is a form of cover backed by a straight forward insurance policy that, in return for the payment of a regular premium, provides a steady, replacement source of income in the event of the policy holder’s enforced redundancy. It really is as simple as that. If the policy holder is out of work through no fault of his or her own – and unemployed for longer than a certain minimum or “qualifying” period (generally between 30 to 90 days) – the insurance policy pays out a regular, monthly replacement income, free of tax, until alternative employment has been found or for up to a typical maximum of 12 months, whichever comes first (some policies allow the option of extending this maximum payout period to up to 24 months, but the cost of the premiums would naturally increase to match the enhanced benefit).

Modern unemployment cover allows the individual to stay totally in control of his or her own financial destiny without relying on government handouts or being bailed out by friends or family. The insured benefits guarantee an income which the policy holder can spend entirely as he or she sees fit – to ensure that critical repayments of the mortgage or other borrowing is maintained or to use as a genuine, all-round replacement income.

Part of that staying in control also relies on being able to purchase precisely the level of unemployment cover that the policy holder estimates to be required whilst looking for another job. The level of insured benefits is determined by the prospective policy holder when arranging the insurance and can cover any amount up to a typical maximum of 50% of his or her normally earned gross salary, or £1,500 a month, whichever is less.

An understandable sense of helplessness stalks the land. Everyone knows that unemployment is growing apace and that redundancies seem to be lurking around every corner. But the individual is bound to feel more than a little helpless when it comes to determining whether or not theirs will be the next job to be lost – and with it the vital pay that goes with regular work. Unemployment protection insurance can ensure that a source of income is nevertheless maintain during any such bout of unemployment and, in so doing, combat that widespread sense of helplessness.

The statistics certainly lend weight to those who want to take matters into their own hands and ensure that some level of income is maintained. According to the British Chambers of Commerce, for example, the current state of economic distress “is likely to continue for some time” said a report in The Independent newspaper on the 7th of April 2009, which confirmed widely held predictions that redundancies would gather pace and push the total level of unemployment from its current two million or so to 3.2 million during the course of 2010.

For those who worry whether their job could be next – and there is enough evidence to suggest that it could be practically anyone’s – unemployment insurance is widely and readily available to individuals who want to lessen the financial impact of such desperate news. In return for a modest monthly premium, policy holders can be assured of a regular replacement monthly income in the event of their being made compulsorily redundant (rather than accepting voluntary redundancy, for example, or simply resigning or being dismissed through misconduct at work).

The amount of such a replacement income – the level of unemployment insurance, in other words – is decided by the prospective policy holder when setting up the policy and will take into account his or her likely financial needs and the cost of the premiums (which are based on the price of covering each £100 of income). Usually, it is possible to insure up to a maximum of £1,500 a month, or the equivalent of 50% of the policy holder’s normal gross salary from work, whichever is the less, in this way. Such a guaranteed monthly income would almost certainly relieve some of the helplessness felt in the event of enforced redundancy.

Although intended as an essentially short- to medium-term safety net for the recently redundant, unemployment protection nevertheless offers a generous period of time in which to find and secure alternative employment. It ensures that a replacement income continues to be paid every month that the policy holder is out of work, or for up to a typical maximum of 12 months, whichever is the shorter period. Indeed, some policies offer the enhanced protection of payouts for up to a maximum of 24 months, although an additional premium will be payable for such extended benefits.

There might have been a time when the similarities between the terms “national insurance”, “unemployment benefit” and “unemployment insurance” could have been so close that they meant effectively the same thing – a state benefit paid to the unemployed and funded through their national insurance contributions. In today’s world, however, where unemployment benefit has been replaced by Job Seeker’s Allowance, unemployment insurance takes pride of place in the armoury of individual responsibility.

Nevertheless, some people still believe that, in the event of their unemployment, it is the state that will come running to their rescue with the financial wherewithal to allow the everyday household bills and expenses to continue to be paid. This is partially true, but only to a very limited extent. The successor to unemployment benefit, the so-called Job Seeker’s Allowance pays £60.50 a week to single people over the age of 25 and £47.95 a week to those under 25 years of age. That is the rate paid to anyone who is unemployed and looking for a job, whatever their last earned salary might have been. The rate of support is clearly not very high and unlikely to make much of a dent in the average person’s weekly deluge of everyday bills and expenses.

Given the meagre level of support available from the state, therefore, what is the alternative for those seeking to retain individual responsibility? It is here that unemployment insurance pays dividends. As any insurance, the payment of a premium is required and, in this instance, premiums are paid on a monthly basis. In return, the individual policy holder is guaranteed the payment of a regular, tax-free, monthly benefit in the event of his or her compulsory redundancy. The insured benefits continue to be paid directly to the policy holder every month for as long as he or she remains unemployed, or for up to a typical maximum of 12 months. For additional security and peace of mind, even this maximum payout period can be extended (to up to 24 months) by paying a somewhat higher monthly premium.

This kind of unemployment insurance can pay out benefits considerably in excess of those available from any Job Seeker’s Allowance. Although the level of cover is entirely up to the policy holder to decide, it is generally possible to arrange insurance that will deliver up to a typical maximum of 50% of the policy holder’s normally earned income or £1,500 a month, whichever is less. £1,500 a month, of course, equates to nearly £375 a week – a considerable improvement on the Job Seeker’s Allowance £60.50 maximum.

Unemployment insurance does just what it says – it insures against the risk of unemployment. But there are other risks to which the working individual is exposed and which can just as easily lead to a sudden and unexpected loss of income. An accident or illness, for example, can lay some off work for several months at a time and in no time at all sick leave turns into unpaid leave. In order to cover these additional risks, and for only a modest increase in the cost of the premiums, unemployment insurance can be expanded into accident, sickness and unemployment insurance to provide effective cover against all three risks.

In an uncertain world, those loans that seemed such a good idea at the time they were taken out can suddenly seem like a millstone around your neck. The risks of accidents, sickness or redundancy can start to create worries about how you would continue to pay those loans in the event of having no income. One way to deal with these worries is to take out loan insurance.

Loan insurance is a form of insurance that may also be called PPI (Payment Protection Insurance) or possibly ASU (Accident Sickness Unemployment). These insurance policies cover the policy holder against a variety of risks that could lead to a loss of income and, as a result, major difficulties in meeting those regular monthly payments for the car, credit cards or mortgage etc.

For the payment of a monthly premium, loan insurance will ensure that you will receive a monthly payment based upon your loan commitments for a specified period should you lose your normal income for involuntary reasons. The amount you could receive each month would vary depending upon the plan you had selected and paid for over time. This could help to keep those bills under control and avoid debt recovery threats or house repossession orders.

Loan insurance will usually continue to pay a monthly sum to cover those loans for a period of 12-24 months depending upon the policy and insurance provider selected.

These policies do have certain conditions. As they exist to cover unforeseen and involuntary situations, they will not usually provide cover for a loss of income due to personal choice. Conditions such as resignations, voluntary redundancy, pregnancy, career breaks, study leave or some forms of dismissal, will most likely all be excluded. Some categories of people may have trouble obtaining this type of cover or will have to pay more for it. That may include people with existing serious medical conditions, those engaged in highly dangerous occupations or sports, some forms of self-employment or full time employment outside of the UK.

Should you need to claim against the policy, the insurance provider will normally expect to see evidence of the reason for the loss of income and during the payment period they may ask to see ongoing evidence that you are seeking alternative employment/income.

Loan insurance can be purchased from independent insurance providers over the Internet. Historically banks and other loan providers also aggressively sold this type of insurance cover at the time the loan was applied for. Purchasing cover of this type from those sources is usually very significantly more expensive than from the direct insurance providers. From 2009, changes in selling regulations will mean that the loan companies and banks will need to wait until 7 days have elapsed following loan approval before offering loan insurance for sale.

This should allow you the time and hassle-free environment to look around at your leisure and find the best deal you can for loan insurance without fear that you are putting at risk your loan application. Good hunting!

Most people use loans from time to time. Whether to buy the house, car or furnishings, sometimes using finance is inevitable and even sensible. The vast majority of people cope with their repayments adequately and responsibly. Sadly though, however responsible you are, this can all change if you find yourself suddenly without income and unable to meet the repayments. Things can become unpleasant very rapidly unless you have loan protection insurance in place.

Most loan or mortgage companies (including the banks) understand that someone can lose their income and struggle. Although they may be sympathetic for a short period, this is unlikely to last long and the threatening letters and repossession notices can start arriving while you’re still trying to get to grips with your new situation. There may be government help available for help with the mortgage interest payments but this will only start after 13 weeks without income, by which time your mortgage company may have started repossession activities.

For peace of mind, many people are now purchasing loan payment protection insurance policies. This is a form of insurance that forms part of a family of payment protection policies called PPI (Payment Plan protection) that will provide you with a regular monthly income should you lose your normal income for reasons beyond your control such as accidents, sickness or redundancy. The amount paid will vary depending upon the policy and plan you’ve selected, but it could be up to 1500 pounds per month (for a maximum of up to 12-24 months). This could make the difference between you leading a normal life while searching for new income or spending all your time fighting off your creditors.

Loan protection insurance can be purchased through the Internet from specialist insurance providers or from the bank/loan company you have borrowed the money from. Until 2009 the lenders frequently sold this form of insurance to loan applicants at the point of loan application processing and may have implied that a ‘yes’ decision on the loan was conditional upon taking their insurance. From 2009 it is proposed that this selling practice will cease and lenders will now need to wait until 7 days have passed after loan approved before they can offer this insurance for sale.

This will allow the loan applicant the freedom to investigate free of pressure, the far cheaper loan protection insurance products offered by the direct insurance providers. Their policies are usually sold online through the Internet and their web sites will contain full details of their various offerings. Taking a little extra time to shop around should ensure you find the best product for your needs and at the very best price.

If you’re worried that your circumstances could change and you would be unable to meet repayments on loans or credit card debts, than you may want to consider a loan protection insurance policy.

Loan protection is a form of payment protection insurance or PPI. The payment protection insurance family of products can ensure that repayments on loans, credit cards and mortgages continue if you suffer from a long-term loss of regular income. There’s even a form of income payment protection which can provide you with a temporary source of income which is not tied in to a particular loan repayment but can be used as needed.

Loan protection insurance will meet your loan repayments if your income stops as a result of something not within your control. You can insure yourself against being made involuntarily redundant or from having to stop work long term due to illness or an accident. Voluntary redundancy, resignation or being sacked are not covered by these policies.

Whether you need redundancy and illness insurance may depend on your own personal circumstances. Some employees may be lucky enough to work for an employer with a generous sick pay scheme so may not need the additional illness cover. If you are considering some form of PPI you need to work out exactly what you need.

When you take out a loan the company who provides it may also offer you some type of loan protection insurance. You are under no obligation to take this insurance. It is perfectly acceptable to go elsewhere.

There are a number of independent insurance providers who specialise in payment protection insurance and if you do shop around you may find that they can offer policies which may be significantly cheaper than those offered by the loan company. They can usually be found through the Internet.

To be eligible for this type of insurance you would normally need to be in permanent employment working at least 16 hours per day.

If you then lose your job or are unable to work as a result of a long-term illness you simply claim on the policy. Your insurer may require that you provide evidence for the reason of your loss of income.

You may have to officially register as unemployed if you have been made redundant and be able to prove on a regular basis that you are actively seeking employment. If you are ill you may need to provide regular medical certificates to authenticate your claim.

You may find that there is a waiting period before any payments are forthcoming. This can be because the insurance company is waiting to ensure that the incapacity to work is in fact long term. You may find that once the waiting period is over, payments can be backdated to the start of the claim.

State benefits can provide a little help but won’t offer any real loan protection insurance. State help for homeowners who can no longer meet their mortgage repayments is restricted to paying the interest so capital debt continues to accumulate.

Like many forms of insurance, mortgage insurance is something you may think you can do without. You may in fact be correct – at least until about 30 seconds after you realise you’ve just lost your income and have no way of keeping up those mortgage repayments on your home.

It can happen to anyone. Once that regular income has been lost due to accident sickness or unemployment, the mortgage can quickly slip into arrears and the letters threatening repossession will start to drop through the letterbox. Government help may be available – but it is limited to help with interest payments only and it only applies after 13 weeks without income. By that time the mortgage account could already be seriously in arrears.

Mortgage payment protection insurance (MPPI) can help avoid this. It works like much like any insurance. A policy is selected and an amount of cover paid for. If you subsequently lose your income for a reason covered by the policy, the insurance company will then pay the agreed monthly amount to help meet the mortgage repayments. These payments will continue for a period of 12-24 months or they would cease once you have secured new income. This insurance income could make the difference between you keeping your home or losing it.

This type of insurance won’t cover a loss of income arising from situations you may have created or help create. That may include resignations, voluntary redundancy, career breaks, study leave, pregnancy and possibly some forms of dismissal. Some people may also find it a little more difficult to obtain cover if they come into certain ‘high-risk’ categories. If you work in a highly dangerous occupation, participate in dangerous sports, have an existing serious medical condition, work part-time, operate in some categories of self-employment or have an irregular employment history, you may find that you have to look a little harder for mortgage insurance cover and be prepared to pay a little more for it.

Most people look for the best deal possible when buying anything and insurance is no exception.

There are two usual sources for mortgage insurance. One of these is the mortgage loan companies and banks etc. Their policies work as outlined above but in general their prices are far higher than alternative sources. Until 2009 many mortgage companies and banks tried to sell this insurance as part of the loan application process but this is now being banned until 7 days after the loan application has been approved.

This delay is good for consumers as it allows time to shop around and consider the second source for mortgage insurance. The direct insurance providers sell their policies over the Internet and they are usually very much cheaper than the banks and similar loan providers. Their policies may be described under the general heading of PPI for ‘Payment Protection Insurance’ and it may be a good idea to investigate them further if you’re thinking about your mortgage. It may help you achieve increased peace of mind and a good night’s sleep!

Mortgage payment protection is insurance for you mortgage repayments against losing your own income. While repaying your mortgage each month of many years you would have to rely on the fact that you would not fall ill, suffer an accident or become redundant and lose your income. With a policy to fall back onto you would not be left struggling with your repayments each month as you would be able to rely on the income provided from it.

The amount that you would get back each month from yoru mortgage payment protection would be your chosen sum of your repayment after the provider agreed to insuring this sum of course. The income is paid back over a certain amount of months, dependent on the provider, as tax free payments once the deferment period had passed. You should check the terms on offer by your provider before taking out the cover as with some you could have to stand to 30 days before claiming and with others it could be 90 days before a claim could be made. You might get payments over 12 months or you could receive 24 months of benefit before the policy stopped. Some providers might also date back the benefit from your cover to the first day that you became redundant or incapacitated.

You could have recovered or found work well within 12 months and cover paying out over 24 months would cost a great deal more in premiums as the benefit would last twice as long. This would have to be weighed up against the fact that if you were to have to claim until the term of the policy, the policy would cease upon reaching the term regardless of your circumstances. Also consider that you could already be in arrears with your mortgage by 3 months if the cover did not payout until day 90. You could therefore avoid stress by ensuring your cover paid out from day 30 and the benefit was dated back.

A policy can be well worth the small premium each month as if you were to fall into arrears with your repayments and be unable to catch up on them you are risking having your home repossessed by the lender.

You might want to take mortgage payment protection against incapacity and redundancy together in the same policy but you could also choose to protect just against unemployment or just against incapacity alone if this were to suit your lifestyle better. The events you do choose to take protection against would go towards how much is paid in premiums each month so you only need to pay for cover that is needed. Other factors taken into account when getting a quote is the amount of your monthly repayment you want to cover and your age. If the provider takes age into account then you would get the cover cheaper the younger you are. Age based protection is an affordable way for the younger home owner to be able to take out protection as often they stretch their budgets to the maximum which leaves little left over for expensive payment protection.

If you have already protected your repayments with mortgage payment protection insurance then you have insurance for your mortgage repayments if you lost your own income. The policy could then be fallen back onto if you were to lose your own income after becoming a victim of redundancy or incapacity. Without anything to rely on you could fall into mortgage arrears which could eventually lead to lender repossession.

To take out mortgage payment protection insurance you first have to decide how much of the repayment you make each month you want to protect. This amount would need to have the provider’s agreement as it is the tax free amount that you would get back in monthly payment for the term once the period of deferment had passed. These terms depend on your provider with some offering to pay an income once you had been redundant or incapacitated for 30 days and with others it might be as long as the 90th day before a claim could be made. Some might continue paying you monthly benefit from your cover over 12 months and other providers could provide you with payments for as long as 24 months. However after this period of time your policy would cease, providing you were still claiming on it of course.

As you are protecting your repayments with the aim of keeping out of arrears you should ask yourself if you really want to wait until the 90th day before seeing any money from your policy. Mortgage arrears of some 3 months could already have built up and they would be causing worry as of course your lender will not have let the missed payments go by unnoticed. You should also take into consideration that you would have to pay out more in premiums for a policy that paid out over 24 months. You could also have recovered or found work within 12 months.

Many homeowners are under the impressions that they would be eligible to claim an income from the State to maintain their mortgage repayments. However, even if you are eligible to claim money from the State any income you received would only go towards maintaining the interest part of your mortgage. You would also need to wait for a period of 13 weeks before you could claim money and mortgage arrears would have already built up by this time. Savings could also be a letdown as they might not last for the duration of your period of unemployment or incapacity.

You can take out mortgage payment protection insurance to provide you with an income if you were to suffer from either of the events. However your circumstances might mean that you only want insurance for redundancy alone. With the standalone provider you could just choose to cover against this event. Alternatively you could just choose to take out cover against incapacity alone if this suited your lifestyle better.

Mortgage cover can be your repayment security against the possiblity of you falling sick, suffering an accident or becoming unemployed by redundancy. With cover behind you there would be an income coming into the home that you would be able to put towards your mortgage repayments. The amount you get towards maintaining these repayments would be your chosen sum of your monthly mortgage repayment which your provider had pre-agreed with when you took on the policy.

The pre-agreed amount of money would be given back to the policy holder as tax free monthly payments once they had been redundant or incapacitated for a set amount of time and would last for so long. This can differ with providers so you will have to check the terms in the small print to find out. With some providers you might get monthly payments from your mortgage cover once you had been redundant or incapacitated for just 30 days and with others you could have to wait for up to 90 days before you would be eligible to put in a claim. Payments might continue for 12 months but some providers could offer you payments that stretched over 24 months. However when the term had been reached the benefits would simply cease and the policy stops.

You would have the choice of what events you wanted to protect against with the standalone provider. You would of course have the option of insuring against incapacity and redundancy together. If this cover was taken you could claim if you were to become involved in an accident or suffered sickness and you were unable to work. You would also be eligible to make a claim on the same policy if you became unemployed. However if you were to get a full sick pay plan you might just take protection for your repayment against redundancy alone. Alternatively if you wanted just to take protection for incapacity on its own, then this is possible.

Mortgage cover can be a far more reliable form of protection for the repayments of your mortgage than risking applying for an income from the State. If you should claim State benefits then you would only be eligible to claim money towards paying the interest on your mortgage and only up to a certain amount. There would not be any money coming in until you had been unemployed or incapacitated for 13 weeks and you could have had letters from the lender. Should you consider using your savings as a means of servicing your repayments you could also be let down? It could take you many months before a recovery was made and you were able to get back to work and it could also take several months to secure work. Your savings might have depleted before this time and you could be left struggling again to find the money needed to maintain your repayments.