It is very easy to see the benefits of unemployment protection but does this ease of understanding transfer into an actual purchase? With the state of the economy sliding, and redundancy rates rising, it has never been a better time to consider insuring your income.
If you were to lose your job at short notice, do you have the means to survive until you regain employment? If you have savings of family funds to fall back on then you are one of the lucky ones. If you are struggling even to qualify for state benefits and you have no other source of income then the benefit from this protection policy could assist you.
Unemployment protection policies pay a tax free monthly benefit if you lose your job due to involuntary unemployment which was unforeseen. If you even had wind of the redundancy then the policy will not pay out.
Depending on the provider you choose, the benefit will be paid for 12 or 24 months. The income can be used in any way you like and can cover various types of bills and expenses.
Because the policy falls under the payment protection banner, the policy can be attached to specific debts such as loan and mortgages. If the policy is attached then the provider of the debt will claim their payment first.
Policy Details
Before applying for a policy, find out what the provider requires of you. You may need to prove the last six months employment history plus you will need to meet the entry requirement. The requirements usually relate to age, residential status and class of employment.
Providers have different checks and balances in place to make sure applicants are not taking advantage of the policies. One such measure is the deferment period. The typical period is 30 – 90 days but this will vary from provider to provider.
In addition, providers often have maximum benefit levels attached to the policy. This means that the benefit will not equal the amount you earned whilst employed. Only a percentage of your gross income will be paid.
You may be able to add cover for accident and sickness, but most likely you will need to pay an increased premium for the privilege.
Choosing A Provider
You can obtain unemployment protection from many different sources. If ever you took out a credit agreement such as loan or mortgage the provider would probably try to sell you a protection product at the same time.
This practice will change if The Competition Commission has anything to do with it. They are trying to make it illegal for providers to sell protection products within 14 days of a credit agreement.
By doing so, consumers will have the opportunity to explore what independent providers have to offer. The truth is stand alone policies are often much cheaper than products from high street companies.
Summary
Now that you’ve seen the benefits of unemployment protection, do you see the need for it? The policy is there to provide financial help when you need and peace of mind during what could be one of the most stressful periods in life.
Related Posts