Archive for the ‘Cover Redundancy’

For some people, the need to cover redundancy with some form of unemployment insurance will be self-evident; for others, there could remain the somewhat misplaced belief that redundancy is precisely the kind of situation in which the fabled “welfare state” will come riding to the rescue.

Those with good reason to worry whether their jobs will survive the current economic recession are those taking heed of the recent newspaper headlines about the rising tide of unemployment. According to The Independent newspaper on the 24 October 2008, for example, on current trends, the total number of unemployed will have reached 2 million by this Christmas, while economic analysts predict that the figure will rise to 3 million by the close of 2010.

With the odds on any one, individual job falling prey to redundancy on an ever-upward trend, therefore, many of those currently in employment are already looking to cover redundancy with insurance that will provide some form of financial security in the event that the worst should happen to their own job.

With those same odds on the risk of other jobs being lost, some people lay store in the provisions of the so-called welfare state. On closer examination, however, these provisions seem frugal indeed. Currently statutory redundancy pay, for example, can only be claimed by those who have been continuously employed by the same employer for at least the previous two years. For those who qualify, the payment is just half a week’s normal pay for every complete year of service for those aged less than 22; one week’s pay for each year of service for those between the ages of 22 and 41; and one and a half week’s pay for each complete year of service for those aged 41 and above.

In addition to redundancy pay, Job Seekers’ Allowance is also payable to those looking for work. But the current rates of that allowance are – at the maximum – a meagre £60.50 each week for those aged over 25 (it is still less for younger claimants).

All in all, therefore, the welfare state offers very low rates of redundancy cover and most working people would be hard-pressed to meet the normal round of household bills and expenses from even the maximum rates of benefit offered – hence the attraction of individually-tailored redundancy or unemployment insurance.

As the spokesman for one of the country’s leading independent providers of this product, Simon Burgess of British Insurance, puts it: “long gone are the days of a cradle-to-the-grave welfare state that looks after us when the going gets tough. In this day and age, it’s down to the individual to make sure to cover redundancy – the welfare state is ill-equipped to make as good a job of it”.

Redundancies can happen to anyone and sometimes it happens with very little warning. If you should lose the income you rely on you could have a struggle on your hands to find the money needed to keep up with your repayments. You might have to service your mortgage or loan repayments and of course there are all your essential outgoings such as feeding your family and paying utility bills to keep the home running. You can cover redundancy with loan, mortgage or income payment protection and the protection is cheaper when you take it from independent providers.

You would take cover by protecting a sum of your loan or mortgage repayments or up to a pre-defined amount of your own income against the chance of you becoming redundant. The amount you chose to insure would be the sum paid back to you if you became a victim of redundancy. The sum of money would be paid back to you tax free and would help towards keeping you out of debt and arrears.

If you should get a quote with standalone payment protection specialists British Insurance you can claim on the policy from just 30 days. They also backdate protection to day one of your redundancy and then continue paying your income for 12-24 months.

If you have mortgage payments to maintain each month you should give some thought to taking out mortgage payment protection insurance. A policy would provide you with an income towards servicing the repayments so that you would not fall behind in arrears and of course mortgage arrears can lead to you losing the home. If you take out loan payment protection this policy would provide you with an income towards meeting the demands of your loan outgoings. Income payment protection to cover redundancy would give you peace of mind which would allow you to continue meeting essential outgoings. You would not have to make a great deal of changes to your current lifestyle which could affect the whole family.

When you Cover redundancy with payment insurance you have to check the terms and conditions of the protection you are thinking of taking out. There are exclusions in all policies and these need checking against your personal lifestyle. Some providers will add in many while ethical British Insurance adds in just the basic few. They also provide you with the information to check on their website and once you have you will have a policy that you are able to rely on if you should lose your income to unemployment.

Most people would want to cover redundancy in some way. Look through the financial pages of just about any newspaper these days and there will be confirmation enough of the forecast 2 million of the nation’s workers on the dole before the end of 2008. Swathes of jobs in the finance sector, of course, are already on the line; but falling sales in the retail sector have led to many shops opening later and closing earlier in an attempt to cut costs; car assembly plants are introducing four-day working weeks; as prices force more and more people to stay at home, up to 30 international airlines are reputed to be close to bankruptcy; and those in the most vulnerable private sector jobs are complaining that the public sector should not be immune from redundancies.

As the recessionary tide bites further and further into the “real” – as opposed to financial economy – job losses are unlikely to halt at the 2-million plateau, but will probably continue to rise well into the following year. It is a grim picture in which very few jobs can be counted on as entirely secure and most people will want to consider ways in which they can cover redundancy with an appropriate level of insurance.

There is never a good time to be made redundant, of course, but in the present climate, when rapidly escalating prices have already emasculated most households’ savings, it couldn’t be worse. No work means no pay. Yet the household bills will still need paying. That is why it is important to have insurance that provides redundancy cover.

This insurance – one variant of the collection of policies commonly named payment protection insurance – operates very simply: if the policy holder should become involuntarily unemployed or made compulsorily redundant, the policy pays out an agreed monthly benefit. This can be any percentage of the policy holder’s normally earned salary, up to a typical maximum of 50% or £1,000 a month, depending on which is the lower sum, although these limits will vary from insurer to insurer. Since the intention is to cover redundancy for a relatively temporary period (until alternative employment is found) the benefit payments are generally limited to a maximum of 12 months, although a 24-month maximum is also available for those who want a longer period of security and who are prepared to pay a higher premium.

Such redundancy cover is frequently packaged together with protection against loss of earnings through accidents or illness – when it is arranged as a combined accident, sickness and unemployment (or simply ASU) insurance.

One of the leading providers of these types of policy in the UK is British Insurance, whose managing director, Simon Burgess, says: “given the current plight of the world economy and the inevitable problems that are being stored up as companies and businesses – of all sizes and across all sectors – struggle to contain costs, we will be seeing a return to fairly widespread unemployment. Anyone in work at the moment will want to safeguard the future and ensure that the family’s income stream is maintained by acting now to cover redundancy”.

The threat of redundancy is one that many people may have faced whether they knew it or not. If your company is going through financial difficulties you might be lucky to get advance warning about lay offs in order to secure alternative employment. If you don’t get advance warning, do you have a policy in place to cover redundancy?

Policies which cover redundancy are designed to pay you a monthly income in the event of involuntary redundancy. It will not cover you if you had prior knowledge nor will it cover you if you volunteered for a redundancy package.

Main Features and Benefits

The income you’ll receive is paid free of tax although your entire salaried income will not be covered. Because of the maximum benefit levels associated with these types of policies, you will be paid a percentage of your gross income.

If you are receiving the replacement income, it will be paid up to 12 months or if you return to work within that period. While benefits are being paid, most providers will not collect premiums from you.

In order to receive the benefits of a claim you will be required to wait out a deferment period of 30 – 90 days depending on the provider. In order to be eligible to take out the cover you must be employed for a minimum of six months as well as meet other criteria.

Selecting Your Provider

The main thing to look at when choosing the provider is the benefits you will receive, but because the policies that cover redundancy are so similar, the cost of premiums is the next deciding factor.

Policies are available through high street providers, but the premiums attached are usually very high. If you were to get stand alone cover from an independent company the premiums you save will be considerable.

Take British Insurance for example; they are an ethical independent company providing protection products in the UK market. If you were to take loan insurance with this company, you could save up to 80% on premiums.

Before making your decision you should also check the terms and conditions of the policy you are considering. Not only that, take note of the manner in which the company deals with your circumstances.

Every provider should take the time to explain the policy details and make sure it matches your circumstances. This ensures that if you were to make a claim the policy will pay out.

Sadly some high street providers have not been doing this and mis-selling complaints were raised with the Financial Services Authority.

You can avoid being in that position by getting clarification on the policy and matching it to your circumstances.

Taking out a policy to cover redundancy will help you maintain your monthly expenses if you were to lose your job involuntarily. It can help keep you going while you look for another job. You won’t have to worry about mounting debts, creditors or homelessness. Thanks to replacement income, it will be business as usual.

If you are looking for an insurance product to cover redundancy, then you’ve come to the right place. In this short guide we will tell you about the benefits of protecting yourself against involuntary unemployment.

The typical policy you should consider having in place is an accident, sickness and unemployment cover, it can also be known as payment protection insurance. In order for a claim to be successful your unemployment must be involuntary so you can’t just quit your job and then try to make a claim, it will not be accepted.

Features of Payment Protection Insurance Policies

• Maximum payment term is 12-24 months depending on the provider you choose
• The policy will pay a tax free income
• You can choose the incidents you want to be insured against if you want to do more than just cover redundancy
• There are maximum benefit levels
• The cost of premiums is based on the level of benefit you choose
• Policies are not usually medically underwritten so they are easier to access

Main Benefits of Insurance to Cover Redundancy

• The best benefit is the tax free income you will receive if you were to make a claim. This income could be the difference between a speedy recovery and a delayed one. In addition it could save you from financial ruin.
• The other benefit is the peace of mind you will receive once your policy is in place. You won’t have to worry about creditors knocking if you are on your sickbed and you can rest assured you’ll be able to keep clothes on your back and a roof over your head.

Choosing Cover

With so many products on the market, the choice of provider often comes down to the quality of benefits you could receive for your premiums. If you shop at high street providers, you will find that their premiums are often much higher than the independent providers so it is worth getting a quote for a stand alone policy.

As an example British Insurance is an ethical specialist provider of protection products and they make it their business to provide customers with superior products at as much as 80% off high street premiums. Once you know where to shop, you can really get a good deal

Summary

Finding insurance to cover redundancy does not have to be difficult, once you know the benefits you are after simply obtain your quote and make your purchase. It is as simple as that.

Depending on your outgoings you could choose to cover redundancy with loan, mortgage or income payment protection insurance. You take out cover by insuring a pre-agreed sum of your monthly loan or mortgage repayments or a portion of your income, up to the pre-agreed amount, against the fact that you could be made redundant. If redundancy happened you would be able to claim the sum you chose to insure back, tax-free for the duration of the policy.

Leading payment protection specialist British Insurance offers mortgage payment protection for around 40% less than the high street lenders and loan payment protection for up to 80% less. They offer cover with few exclusions and which comes with no excess as the protection is dated back to day one of you becoming unemployed. You could claim after the 30th consecutive day of unemployment and claim on the cover for up to 12 months if you were to remain unemployed for that length of time. There are some providers that might offer protection that would cover you for 24 months but you would have to check their terms and conditions to find out. You also need to check to find out when you could put in a claim as there are providers that state 90 days deferment period.

If you chose to cover redundancy for your income with income payment protection insurance, the sum of money you received back would go towards you servicing all of the essential outgoings that came into the home. There would be no worrying about having to cut back or juggle the bills around and you would not have to make drastic lifestyle changes that could affect the whole family.

Mortgage payment protection would supply you with an income towards financing your mortgage repayments each month while you searched for work. It is essential to stay on top of your mortgage repayments because mortgage arrears can lead to the lender taking court proceedings to have you evicted from your home, if you cannot make an agreement to catch up. With cover behind you to fall back onto you would not have this worry.

You can cover redundancy for your loan repayments with loan payment protection insurance. The sum of money from the policy goes a long way towards you being able to maintain repayments and avoid having your credit rating affected. If your credit rating is affected as the result of missed payments you would find it hard to secure credit of any kind in the future as your credit rating is one of the main factors taken into account when you apply for credit. Along with this you would of course have to reach an agreement with the lender to repay or face them taking you to court. If the loan was secured you could also lose your home to the lender through repossession.

Redundancies can happen to anyone and sometimes it happens with very little warning. If you should lose the income you rely on you could have a struggle on your hands to find the money needed to keep up with your repayments. You might have to service your mortgage or loan repayments and of course there are all your essential outgoings such as feeding your family and paying utility bills to keep the home running. You can cover redundancy with loan, mortgage or income payment protection and the protection is cheaper when you take it from independent providers.

You would take cover by protecting a sum of your loan or mortgage repayments or up to a pre-defined amount of your own income against the chance of you becoming redundant. The amount you chose to insure would be the sum paid back to you if you became a victim of redundancy. The sum of money would be paid back to you tax free and would help towards keeping you out of debt and arrears.

If you should get a quote with standalone payment protection specialists British Insurance you can claim on the policy from just 30 days. They also backdate protection to day one of your redundancy and then continue paying your income for 12-24 months.

If you have mortgage payments to maintain each month you should give some thought to taking out mortgage payment protection insurance. A policy would provide you with an income towards servicing the repayments so that you would not fall behind in arrears and of course mortgage arrears can lead to you losing the home. If you take out loan payment protection this policy would provide you with an income towards meeting the demands of your loan outgoings. Income payment protection to cover redundancy would give you peace of mind which would allow you to continue meeting essential outgoings. You would not have to make a great deal of changes to your current lifestyle which could affect the whole family.

When you Cover redundancy with payment insurance you have to check the terms and conditions of the protection you are thinking of taking out. There are exclusions in all policies and these need checking against your personal lifestyle. Some providers will add in many while ethical British Insurance adds in just the basic few. They also provide you with the information to check on their website and once you have you will have a policy that you are able to rely on if you should lose your income to unemployment.

You are able to protect your mortgage and loan repayments against redundancy for a lot cheaper than you would be able to if you add the protection in alongside the borrowing. High Street lenders offer you the chance to cover redundancy with their products. However, if you choose to take loan cover with British Insurance you would save as much as 80% and for mortgage insurance as much as 40%.

You can protect your repayments by covering them against redundancy by insuring a pre-agreed amount of your mortgage or loan repayments or a portion of your income, set by the provider. This sum of money would then be claimed back as a tax-free income if you were to become redundant and the policy would payout for the term agreed in the terms and conditions.

If you had protected a portion of your income with income payment protection the sum of money you received back from the policy would go towards you being able to keep up with all of your essential outgoings. You would not have to worry about making lifestyle changes or have to make cutbacks. Loan protection would provide peace of mind that the loan repayments would be covered up to a certain amount and this goes towards you keeping your credit rating intact and keeping you out of court. If your mortgage repayments are a big worry you could cover a portion of them with mortgage payment protection. This would go towards you being able to maintain the repayments if you became redundant and you would not have to worry about the lender taking you to court to repossess your home.

All forms of payment protection taken out to cover redundancy would begin paying out with ethical standalone payment protection provider British Insurance from day 30. They would backdate their protection to the first day of you being made unemployed and would then continue to pay you an income for up to the 12th month. If you choose another provider you would have to check the small print of the terms and conditions because some might ask that you are unemployed for anything up to the 90 days. You would also have to check to see how long they would continue to supply you with an income for as with some providers you might be offered 24 months protection. You also need to check the exclusions as all providers will add in the most common ones at least, with some adding in more than others. British Insurance supply you with the information needed so you can check eligibility before you take on the protection. It is imperative that you do check this information against your circumstances if you want a safety net to be relied upon.

You can cover redundancy for less than you think if you shop online and choose to take out your protection with an ethical independent provider. British Insurance would offer loan cover with savings of as much as 80% and mortgage payment protection for around 40% less than you would be able to get it with the lender on the high street.

You can take out protection to cover against redundancy by insuring a certain amount of your loan or mortgage repayments or a portion of your income. You would then receive this sum back, tax-free if and when you needed to make a claim on the protection. The money you received back would be used towards whatever bills you have to pay and depending on which type of protection you chose to take out.

If you had taken out loan payment protection the sum of money gained back when making a claim would be used towards servicing the repayments of your loan. This would mean that you would not be at risk of falling into debt and having your credit rating affected. You need to keep this in good standing if you want to borrow again in the future.

Mortgage cover would be there for you to keep on top of your mortgage repayment and so not put yourself at risk of the lender repossessing if you fall into mortgage arrears. Just a single missed payment would be cause for concern as you would have to catch up on the missed payment. Failure to do so would mean the lender choosing to have you evicted.

Income cover would provide you with money towards all of the essential outgoings you would have to make each month. The money could be used towards whatever you needed to payout and would save you from having to make changes to your lifestyle to make ends meet.

If protection is taken to cover redundancy with independent provider British Insurance you could make the first claim after being unemployed for just 30 days. The protection would then carry on paying an income for up to the 12th month and then it would cease paying out. When shopping around for payment protection you could find that some providers might state in their terms and conditions that you would have to wait for up to 90 days before claiming. You will also have to check them to find out how long the policy would continue. Some providers might offer to pay benefits for up to a maximum of 24 months before the cover stops.

Being made redundant would be a huge worry for anyone. While you would have to look around for another job you would also have to be able to continue paying your outgoings. This could include maintaining mortgage repayments, loan repayments and keeping the home running smoothly. You can choose to cover redundancy by taking out loan, mortgage or income payment protection.

You would insure up to a certain amount of your monthly loan or mortgage repayments or a portion of your monthly income and this would be the sum that you received back if and when you had to put in your claim.

If you chose to cover your mortgage repayments then you would have an income towards being able to maintain your repayments without having to worry about falling into debt. If you were to miss just one single payment on your mortgage the lender would send a letter asking you to catch up. Without an income you might miss more payments and this could lead to the lender starting proceedings to take you to court to repossess your home. With mortgage payment protection behind you it would go a long way towards ensuring that this does not happen.

Loan repayments could be insured and this would go a long way towards you stopping your credit rating from being affected. If you miss payments this would be the first thing to be affected and could make obtaining credit or any kind in the future very hard. You could also be taken to court by the lender and this could have your possessions taken by bailiffs to go towards paying off your debt.

Income payment protection can also be taken out a redundancy cover. The benefit from this policy would go towards you being able to maintain all of your essential outgoings. There would be no worry about where you would get the money from to put food on the table for your family or whether you could pay the utility bills. In fact you could use the benefit you received for any bills.

All forms of protection taken to cover redundancy with standalone payment protection provider British Insurance would begin to pay you an income once you had been unemployed for a period of at least 30 days. They would also date the protection back to the first day of your unemployment and would continue to payout for up to 12 months. This can enough time for you to have found work, however there are some providers that might ask you remain unemployed for at least 90 days. You would also have to check the terms of other provider’s policies as they can ask that you wait to put in your claim for anything up to the 90th day of redundancy. When checking for the starting and end dates also check the exclusions against your circumstances as all providers add in at least the most frequently found ones.