Are you concerned about the possibility of losing your job? In a tough economy, people lose their jobs every day and many of those people were unprepared to be out of work. No one wants to lose their job and no one wants to think about how to survive if they do, but it is always wise to be practical and plan ahead. You have a responsible to protect your family’s financial well-being and doing so means looking into redundancy protection right away. You cannot wait until you face involuntary redundancy and you need to realize that the State has very strict criteria before it will offer support, and even if you meet the criteria, the assistance is often not enough to keep up with your bills.

Redundancy protection is an insurance solution that falls under an umbrella of products known as payment protection insurance (PPI). The protection usually takes the form of one of the three common types of PPI. Loan payment protection insurance, mortgage payment protection insurance (MPPI), and income payment protection insurance are the common products that you can purchase. Though they have slightly unique purposes, the basics of the products are the same. In essence, redundancy cover pays out a replacement monthly income pay cheque to you if you face involuntary redundancy.

An overview of redundancy protection policies

Although there are many similarities in payment cover policies, the modest differences from one provider to another are crucial to understand. The key terms and conditions are important to understand. The first major point to consider when selecting the best cover is how long the policy runs. Some policies run for a period of 12 months, while others run for a period of 24 months. How long do you need protection? Some people are more confident in their ability to quickly find work based on education and experience. Others who are not as confident may want the longer protection to give them more fallback time to find another job.

Another very important factor in redundancy cover is the point at which benefits payments begins. Some policies begin to pay out monthly benefits 30 days after the inured event occurs. Others begin to payout either 60 days or 90 days after the insured event. There are also polices that offer backdated benefits to the first day of a claim. Can you afford to wait 60 or 90 days for benefits payments to begin? This is a question you must answer before agreeing to an insurance plan. If your replacement payments do not arrive for 2-3 months following the end of your regular income, you must have alternative funding or savings to help fill the gap. Your mortgage and loan payments, bills, and responsibility to your family do not just go away.

Payment cover policies generally have a maximum monthly benefit payout of £1500 or half of your normal monthly gross income, whichever is lower. Realize that though this does not replace the entirety of your lost monthly income, the payments are non-taxed so the actual net pay is fairly significant. The goal of the insurance is to help sustain you as you look for work. There are some people who may opt to not take the maximum protection as a way to save money. Though not advisable for many, people with other income or savings may be safe taking on a smaller benefit.

Redundancy insurance eligibility guidelines

Be sure you know whether you are eligible to receive benefits from the insurance before agreeing to purchase a plan. This may sound obvious, but many consumers have been duped by some unscrupulous sellers simply because they were unfamiliar with the payment cover products. In order to be eligible to benefit from unemployment protection, you must be employed full time for six months. Retired people and part time employees are typically all ineligible to receive benefits of the policies, yet some banks have still sold to these people. This mis-selling caught the ire of consumer watch groups and monitoring agencies in recent years.

Additional benefit opportunities with unemployment insurance

Protection against involuntary redundancy is obviously an important security for your family. However, there are some other potential challenges that can and do come up that might affect your ability to work and make money. Some people unfortunately suffer from serious injuries or prolonged illnesses that prevent them from working. Many providers allow you to add protection for illness and accident as part of the covered events with redundancy protection. In fact, you can usually by one, two, or all three of these common covered events (accident, sickness, and unemployment). Some people might prefer just to acquire unemployment cover if their employer has adequate illness and disability protection. Similarly, others may prefer just accident and illness benefits if they are comfortable in the ability get another job quickly.

One additional add-on benefit that some generous providers offer that you might also consider is carer cover. This protection is nice in that it provides replacement income if you must leave work to care for a family member who is sick or ill. Many people cannot afford to do this and must deal with the stress of not being able to help the ones they leave.

Where and how to buy unemployment cover

There are typically two types of provider of unemployment insurance. One is the financial institution and the other is the independent insurance specialist. Financial institutions are large banks that deal in a multitude of financial products and services. The difference is that large banks are more of a general financial provider while independent insurers specialize in protection products. This often gives the specialist a great ability to help you get the right protection at the right price. Specialists usually work with the top insurers to bring the top rates and comparable plans.

Financial institutions have been hit hard in recent years by bad public relations stemming from a 2005 super complaint filed by the consumer advocate group Citizen’s Advice. The complaint brought before the Office of Fair Trading (OFT) centered on a couple main concerns. First, the group did not like the common practice of institutions of bundling loan products and insurance products. This often leads to buyer manipulation and pressure selling tactics. The group also addressed the mis-selling practice of targeting those people mentioned who are not eligible for cover.

At the same time the Financial Services Authority (FSA) conducted its own investigation and charged fines against many well known high street companies it found guilty of mis-selling. This sent a clear message that the agency would not tolerate practices that are unfair to the marketplace. It also was a sign to consumers that they needed to become more knowledgeable about the benefits of unemployment insurance and how to buy cover on the open market.

The OFT referred the payment protection insurance sector to the Competition Commission for further assessment. For its part, the Commission put together several recommendations for improvements in the sector, most of which are to be in place by the end of 2009. The first major issue addressed was the bundling of products. Large sellers had long sold payment cover to new borrowers of mortgages, personal loans, and credit cards. This practice often led to pressurized selling by which consumers were influenced to believe they had to take on the lender’s product. Other lenders hid the insurance premiums in the fine print of the documentation and spread the costs out over the course of the loan repayment to hide just how expensive the premiums are. The Commission placed a 7 day waiting period that bans lenders from selling payment protection insurance products to a new borrower until seven days later. This prohibits pressure selling and allows consumers to explore the market.

The Commission also resolved that all sellers of payment protection must communicate the cost of their premiums per £100 in benefits. This is certainly an advantage for independent insurance specialists who have much more affordable premium rates for their products. Now that consumers are more aware of their options, they get to save a lot of money since independent providers have loan payment insurance that is 10 times less expensive than institutions sell it for. Mortgage payment cover is usually four times less expensive and income payment cover is about five times less costly. These discrepancies mean more consumers are finding access to better values in redundancy protection.

Conclusions

Remember these main benefits and factors related to redundancy cover when looking to protect your family with the best redundancy protection policy:

• Redundancy insurance is your best and maybe only way of protection your family from financial devastation during involuntary redundancy
• You can add benefits for accidents, illness, and carer cover to get a more full product
• Independent specialists have much less expensive PPI policies than financial institutions
• Independent insurers have a much better reputation for knowledgeable support and assistance in selecting the right redundancy protection.

Imagine the nightmare of losing your job or suffering an injury or illness that leaves you incapacitated for weeks or months. Now, consider the pressure that is added when you think about the lost income and financial strain that you and your family would face. Chances are, unless you have significant savings, or have little to worry about with regard to money; you would be open to learning about products that could help you in these situations. The reality is there is only one set of products that offer a solution to your financial need when you are out of work and missing job income. Redundancy protection is the main purpose of a portfolio of products known as payment protection insurance. You can usually add benefits for incapacity as well.

Payment cover products pay monthly benefits for a specified period of time after you leave work involuntarily because of a covered event. There are three typical types of products. One is mortgage payment protection. This insurance pays benefits that you can use to make your monthly mortgage repayments. Protecting your home is probably one of your most pressing concerns after losing your job. Maybe you have significant debt to worry about. If so, loan payment insurance might be the right insurance for you. This insurance pays benefits that you can use to make your personal loan and credit card payments. A third option is income payment protection. This is a more general use product that you can use to pay your bills, buy groceries, and to purchase household items and other things that you still need when you are out of work.

If you want to buy redundancy protection, which if you don’t have it already, you probably will by the end of this article, you usually have to be a full time employee for at least six months. This umbrella of insurance solutions does not usually offer benefits to people that are retired, working part time, or who have pre-existing medical conditions. The basic idea is to cover your income, to whatever extent is possible, so that you and your family can survive for a period of time while you are not collecting job income.

Equip yourself with knowledge of redundancy cover

To enter the market for payment protection without a proper understanding of the products and their effect on you is unwise. There are some great opportunities to find value in this insurance category, but you have to know what to look for, where to go, and how to buy to experience it. It is virtually impossible to learn and retain everything there is to know about any insurance product, including those in the payment cover portfolio. Fortunately, you don’t need to memorize everything; you only need to learn the most important details to give you the chance to get a good deal.

One of the main considerations is the initial payment date for your first benefit. This is vital because the point of payment protection is to help you get through your period without regular employment income. If you have a delay between your final job paycheck and the start of your benefits, you could get behind in your mortgage, loan, or other bill payments. People on a strict budget with limited sources of funds need to try to find policies that deliver a first payment at 30 days after an insured event. Some plans would pay the first benefits after 60 or 90 days. Some employers pay nice severance packages that could carry you through at least 30 days or so. If you have such a package, or some savings to get you through, you could have some flexibility for 60 or 90 day starting points if the other features of the policy are idea.

Of course, benefits payout for a period of time and once you have an idea that you can wait for whatever gap exists for the initial payment, you need to know how long payments will keep coming. Some redundancy protection plans offer benefits that are paid over a period of 12 months. Depending on the other aspects within the policy, that might be a suitable length of benefits for you. With other plans, your benefits would be paid over a 24 months timeframe. This spreads your benefits out a bit longer and means you would probably have some more time to survive following a covered event.

A final major detail that you need to think about in putting together or selecting the appropriate payment cover is the amount of benefits you need. The key is to make sure that you buy enough benefits to take care of your financial needs during the period that you need them. For most people, the safest approach is to buy the highest level of insurance possible. With most providers, this amount is either 1500 Pounds or half your gross monthly income. Whichever of these amounts is less is the benefit you are eligible to collect each month. There is certainly no obligation on your part to pay for the maximum level of benefits. You could buy less cover. Generally, this isn’t wise, though, unless you have other supplementary income or funds, and you are pretty sure you can quickly get a new job.

Building a broader redundancy insurance

The key points just discussed are part of the way you build an insurance plan that is deep in protection and benefits. To expand the breadth of your coverage, you need to try to have as many covered events as possible within your plan. To begin with, think about the two most common protections purchased for a payment cover policy. Involuntary redundancy is kind of the symbolic event protected by most providers. However, most also allow you to insure for incapacity because of injury or illness. In fact, you can often select either type of protection or include both. Most often having both of these situations insured for gives you the most complete product. But, there are times when you may not need each item covered. Also, there are some opportunities to get even more events protected by your policy.

Why would a sane person not buy benefits for both redundancy and incapacity if available? Some people pick one or the other simply to save on premiums. This is not a good reason to avoid having each type of protection. A good reason is when purchasing benefits for a particular event is unnecessary or repetitive. This might be the case if you have an employer that already pays benefits for situations of illness or injury. There certainly are providers that do this. Why pay for it if you already have it. A slightly more risky venture is to not include redundancy benefits in your cover. There are people who do this just to avoid paying premiums, which is not a good idea. If you have savings and a good set of job qualifications to quickly find new work, your risk to reward ratio might lead you to just buy for incapacity.

Have you heard of carer cover? This is a protection that pays benefits when you have to leave work because a family member is incapacitated for injury or illness. Sometimes, family members live on their own and have no one to care for them. It can be stressful if you find yourself faced with deciding between your job and helping your loved one. If you get carer cover included in your redundancy protection, you won’t have to make the decision because you would get monthly income benefits for a period of time while you help take care of the person. This is a great add-on to your policy, but you have to look around as only some providers include this free of charge. There are some other potential items you can find to add for either a small or modest fee. Generally, the more events that would pay benefits if you lose your job income, the more secure you and your family can feel with your insurance policy.

Sources of redundancy protection

While there are lots of companies that offer plans for payment cover, most can usually be classified as one of two types of providers – financial institutions or independent insurance companies. In broad terms, financial institutions are the general financial service providers, while independent insurers are the specialists, meaning they have more specific emphasis on insurance products, like payment protection. What does this mean for the consumer? In the past, not much. Financial institutions, because of their vast coverage of the financial sector made many sales because they leveraged their other products. More recently, though, consumer awareness has grown, and many people are taking advantage of the better value and greater specialization available through independent insurance companies.

So, what happened to change things? In 2005, a leading consumer advocate group, Citizen’s Advice, presented a super complaint to the Office of Fair Trading (OFT) regarding what it believed were pervasive unfair selling tactics in the sector. While there were several issues presented in the complaint, a couple stood out as key ones that consumers had been dealing with for years. One was the mis-selling of policies to consumers ineligible to collect benefits. This issue was actually addressed by the Financial Services Authority (FSA), which conducted its own investigation. The other was bundling of payment cover products with loans and other financial products. This practice stood out as one that restricted fair and open competition in the market.

Many consumers overpaid for expensive payment protection plans from banks for years because they felt obligation to buy the bank’s cover in order to get the loan they wanted. Of course, lender’s were more than willing to add to this pressure, sometimes even using deceit and hiding important details in fine print. By spreading the cost of the insurance over the repayment period of the loan, it was easy for the institution to avoid referencing the actual expense to the customer for the insurance.

The OFT saw that there were some things that needed to be addressed and it asked the Competition Commission to do a full review of redundancy protection. The Commission did conduct a thorough review and made several recommendations for industry improvements. The most consumer-friendly change was the implementation of a seven day waiting period between the close of a loan and the sale of payment cover by the lender to the borrower. This move helps consumers to consider their options with each product separately, as opposed to feeling obligated to buy expensive insurance from their lender.

Independent insurance companies have risen in prominence because of the new change that creates a more open and host marketplace. These companies have generally offered much more affordable premium rates to go along with their industry expertise, service and support. Unfortunately, consumers are just now starting to recognize this because they have the time and the ability to explore the market before buying. Independent companies usually sell mortgage cover four around four times less cost than you would get it for from a financial institution. Income payment cover is offered for a discount of about five times. Loan cover is regularly up to ten times cheaper from an independent provider. Another change created from the Competition Commission’s review is stipulations that require companies to disclose, uniformly, their premium rates. This makes it more difficult for companies to hide the cost of expensive policies.

What about the mis-selling issue. The FSA went to great links to help curb this very disturbing practice. Whether they were preying on unknowing consumers or simply neglecting to ask the right questions, many large companies were selling payment protection products to people unable to benefit from them because of eligibility requirements. The FSA took action by fining companies, including several on the high street, following its review in 2007. The agency has also committed to monitoring developments to make sure there is not a return to such practices.

There has essentially been a major overhaul of the payment protection insurance sector in the last few years. The government agency investigations combined with more broad awareness of the market by consumers has put the market in control of the sector. Open disclosure and fair selling tactics are becoming more the norm. Companies that used to succeed through pressure and deception are now forced to compete on product quality, service, and price, which is how the free enterprise system should work. Based on the natural value of what they offer, independent providers have become more dominant in the sale of these cover solutions.

Another advantage of buying from these specialists is that many have intricate websites where you can find additional educational resources to become more educated. Many online specialists also allow you to complete quote requests online that either provided an automated return of product options, or a manually-generated return within a quick turnaround timeframe. You can just fill out some brief details in a quote request form and answer some basic questions that help the provider to narrow in on the types of products and features that are best for your needs. What you get in return, usually, are policy options that allow you to compare rates and terms. Then, you can use your knowledge and ask questions of the provider to hone in on the best plan. Before you purchase, make sure you have asked every important question and that you thoroughly understand the policy based on the key components we discussed. Any reputable insurer will be open and honest in discussing the plan.

Other things to keep in mind about buying redundancy protection

Take charge of your purchase process early. You are in control of things because you are ultimately the customer buying the product. The time when financial institutions were able to dominate the marketplace because of their broad range of financial coverage is over. Now, all types of providers have to compete openly and honestly in this insurance sector to capture your business. That means offering a good portfolio of solutions with the features and terms that you need. It also means offering a level of service and support that you need when the time comes to use your insurance. And, of course, it means reasonable premium rates that make it worth your investment to have the benefits possible with payment cover.

When buying a product for redundancy protection in today’s environment, you have to stay current with the market and the information available. Overall, conditions are much more favorable for the consumer, but because so much has happened in the last several years, there are still some adjustments going on. The main objective of the oversight agency is to have a business environment that offers fair and open competition among companies and ethical practices that are reasonable for consumers. Current regulations and awareness have certainly helped product a climate more in this mold. Communication of product terms and premiums rates is more open than ever from providers. Consumers have more familiarity with their options and are much better equipped to take advantage of value.

Understand plainly that buying an insurance policy is your best way to gain the financial protection you need when a covered event occurs. Many people have made the mistake of thinking that the government automatically jumps in to save people when they become unemployed. Be aware that this is very rarely the case. Occasionally, there are people that get some assistance, but the amount of support is usually not enough to make it through a period of lost job income. With payment cover, you are in control of making sure that you have the right amount of funds available to you after redundancy, incapacity, or something else that might leave you without job income. Think about the struggles your family might go through if you don’t have any type of financial recourse for losing your job income.

When you explore the various product options that you have, remember to dig through the details to consider the important features that you need to know. You need to plan ahead of time what characteristics you want in your policy. If you need a payout period that is 24 months, instead of 12, make sure to communicate this. No when you absolutely have to collect your first benefit payment. While it might limit the number of products available to you, if you need a 30 day first payment date, go for it. Otherwise, a 60 or 90 day starting point might be okay with a plan that has other favorable terms. Try to find other ways to enhance your value with add-on items and favorable terms and conditions.

Hope that you never have to use your benefits. A negative point of view would be to look at say that it is a waste to buy cover and never have any benefit for it. However, the wise perspective is to realize that peace of mind is a tremendous emotional benefit that comes into play when you are covered. Losing your job or suffering serious injury or illness can have challenging effects on your life. Most people would prefer not to have to deal with these situations. Without insurance coverage, though, the stress and the burden are multiplied greatly. Don’t put yourself in that situation. Explore your options sooner rather than later.

Start by looking at resources including online sites that have articles, news and industry updates. Complete a quote questionnaire that tells the provider what you need and some details they need to give you the best product options. When you get back some products to compare, you will get an idea of what types of benefits you can get, what terms are available, and how much your redundancy protection is going to cost. Take the time to compare your options and discern which product and provider is the best for you. Do your homework, but don’t wait too long as you need a plan in place.

You may think that you’re at no real risk of redundancy and therefore do not need an insurance policy offering redundancy protection in Manchester.

It is to be sincerely hoped that you’re right in thinking that, but if your employer forgot to read the script, redundancy could arrive out of the blue. It may not even have been your employer’s personal decision – perhaps the bank has just ‘turned the screw’ and insisted upon large scale reductions in costs including the salary bill.

Whatever the cause, once you have your redundancy notice and have recovered from the shock, your mind is likely to turn quickly to finance.

However good a redundancy payoff you’ve received, it is unlikely to offer you financial security for the rest of your working life. Naturally your first priority will be to seek new employment but it may be unwise to assume that replacement income is going to be available very rapidly. Even if you are successful with the first job application you make, it is likely to take several months just sending applications in, attending perhaps several interviews, waiting for decisions, perhaps medical examinations, job offers and eventually starting work.

By the time you receive your first new payslip your finances could have been under severe strain for some considerable time – and that is the context of receiving a fairly quick new job offer. If that is not the case your finances may be in a very serious condition indeed.

One of the biggest problems you’re likely to face is those regular monthly payments on loans for things such as the car, HP, credit cards, and of course the mortgage that provides the roof over your head. Although some lenders will be sympathetic and offer to help where they can if you’ve lost your job, others may be less so and will move quickly to recovery and repossession activities. Even those lenders that can offer some assistance through payment holidays or similar arrangements are unlikely to be able to continue them for anything more than a short period.

If your car, furniture and perhaps even house, are all being threatened with repossession then it’s unlikely that you’ll be able to give your undivided attention to job hunting.

Given the gravity of the risks here, some thought as to your options may not be a bad idea. You could:

• Ignore the risks and hope it never happens
• Develop a strategy that if it happens you’ll rely on people’s good-will to keep you financially afloat (including government help)
• Take some control over your future by having insurance in place that will generate money if you’re made redundant.

If the first option appeals then there’s not much that can be said other than ‘good luck’!

If you plan to survive through option 2, well you may need similar good fortune. Government help over and above basic state benefits is limited to some help with a proportion of the interest-only on your mortgage payments. You will have to find from somewhere the remaining interest payment percentage and all this assumes that your mortgage lender will be willing to co-operate by accepting interest-only payments for a period of time.

Option 3 involves having an insurance policy that will provide redundancy protection in Manchester. Through this sort of policy, if you’re made redundant you can either arrange to have the policy pay you a monthly income or perhaps arrange for it to pay some of your key monthly bills such as the mortgage and car payments etc.

These types of policy could pay out up to 1500 pounds per month to help keep the wolves from the door. This could continue until you find another job up to a maximum usually of 12 months although that may be 24 months in the case of some policies.

Of course insurance cover for redundancy protection in Manchester does cover exactly what it says – i.e. genuine redundancy. It won’t pay out for things such as resignations, pregnancy, career breaks, some types of dismissal and most of all, voluntary redundancy.

If you would like to have a little more certainty about your redundancy contingency plans, you can buy this type of insurance from one of two generic sources.

You can usually find this insurance being sold by the lending companies. As they already have an ‘inroad’ into their client base their prices are usually several times more expensive than those available from the other major source – the specialist providers of redundancy insurance policies operating on the Internet.

These types of company sell redundancy protection in Manchester on the open insurance market and as a result their prices are extremely competitive and far cheaper than those of the lenders. It may be that saving money isn’t a concern to you, but if it is, checking them out could be a smart thing to do.

One of the few certainties of life is that little in life is certain. One day you’re going about your normal daily routine and the next you get made redundant and your world turns upside down. Having redundancy protection in Liverpool can help you to regain control of your life should you lose your income through redundancy.

Redundancy protection is a type of insurance that belongs to the Payment Protection Insurance (PPI) group of policies. The primary function of this type of insurance is to provide you with an alternative way of meeting your credit repayment commitments should you lose your income through no fault of your own.

There are three main levels of cover. The first and most comprehensive is Income Payment Protection, which can provide you with a tax-free lump sum to replace part of your lost income. This money can be used as you see fit to maintain your lifestyle. It may not match your previous income exactly but could be enough to see you through the difficult times.

The second category is Loan Insurance and it covers credit arrangements like credit cards, car loans, home improvement loans, furnishings loans etc. The third is Mortgage protection, which specifically targets home loans.

Repayments from Loan and Mortgage insurance policies are likely to be made directly to your lender by your insurance company so you do not even need to get involved in the transfer.

The amount you receive from these loan based policies will depend on the size of your monthly commitments to credit companies but they can typically provide up to 1500 pounds per month or 50 per cent of you income which ever is the smaller amount.

If you’re looking for redundancy protection in Liverpool almost by definition you need to be in employment. Normally the insurers will insist that this employment is permanent and although it doesn’t always have to be full-time you may have to work a minim number of hours per week.

Once you have taken out a redundancy protection in Liverpool policy and provided that you have held the policy for at least 6 months and your monthly premiums are up to date, then if the worst happens and you do get made redundant you simply have to inform your insurers about your change of circumstances. They will put the wheels in motion.

As part of the claim process, you may have to provide your insurers with proof that you are officially registered as unemployed and throughout the claim period they will expect to see evidence that you are actively seeking work.

Many policies of this kind can take anything from between 30 and 90 days to start making payments. You will find that some policies will backdate payments to the start of your claim. Others may not though and you may need to take account of this.

It may pay to read through the policy terms and conditions to make sure that you understand what is going on and to help reduce any misunderstandings that could cause confusion or delays.

Payment Protection insurance is not designed to deal with long terms changes in your circumstances. It is intended as a short-term solution to financial problems. The maximum payout period for most redundancy protection in Liverpool insurance policies is 12 months. You may find policies that provide cover for 24 months but these are less common.

It’s not just redundancy that can be covered by payment protection insurance. For a few pounds more you can also insure yourself for loss of income due to not being able to work as a result of a long-term incapacity due to an accident or illness. The key point for all policies of this nature is that your loss of income is through no fault of your own so voluntary redundancy, dismissal, resignation etc will not be covered.

You could purchase redundancy insurance from your own lender or from any of the other big high street names and you may well have been offered this type of cover when you took out a loan with them. What you will find though that this is a very expensive way of doing things.

Another source of this type of insurance is the independent insurance supplier. They primarily work over the Internet and are specialists in this field. Their policies can be significantly cheaper that those of the high street lenders and can even provide better cover. If you are considering buying redundancy protection in Liverpool you could be surprised at how much money you could save by surfing the net a little.

If you should lose your income through becoming involuntarily redundant you still need to find the money to service such as your rent and utility bills. If you have a mortgage then meeting the mortgage repayments each month is a necessity. The same will apply to the commitment of a secured or unsecured loan; you will need to find your repayment when it was due each month. If you have one of three forms of redundancy protection to fall back onto then your search for work could become that little bit easier at least financially.

What will redundancy protection do?
Redundancy protection will pay you an income towards you being able to meet the repayments or outgoings that you choose to take protection against, be it your mortgage or loan repayments or to supply an income in general. You will have to stand to so many days of unemployment, which will depend on the provider and then you could make your claim. This income will be tax free and could be used towards you keeping your chosen repayments or outgoings up to date.

How much income will I get from the policy?
The amount of benefit you want to receive back from the policy if a claim had to be made will be the amount you chose to protect and which the provider pre-agreed to at the time of you taking out your cover. For instance if you were taking out income payment protection as your form of redundancy insurance you could insure up to half of your gross monthly income or £1,500 whichever amount was the least. The limit will depend on the provider so you will need to check with them before taking out your policy.

How long will I have to wait before making a claim?
With some providers you might need to wait until the 30th day of your unemployment had passed before putting in your claim. With other providers you could have to wait for up to 60 days and some might even ask that you stand to the first 90 days. As there is such a difference you could want to ensure that yours paid out sooner rather than later as the latter can be a long time to manage without any money.

How long will my benefit pay out?
Your policy might continue supplying you with an income for up to the 12th month if you should remain unemployed for this length of time. However there are some providers that could offer you 24 months of payments before the benefit will cease. Again you will need to check in the terms offered by your chosen provider when you are comparing the cost of the insurance.

Choosing additional cover

Redundancy protection is a great way of ensuring that if you lost your income to unemployment you will still have an income coming into the home each month. however should you also want to have insurance against the possibility of becoming ill or suffering an accident and being unable to work then you could pay a little more each month and have cover against both events.

Your provider might also give you carer cover in your policy and if so you will be able to make your claim in the event that you had to give up working full time to stay home and take care of a loved one. However not all providers are generous enough to give you this protection so you will have to check when taking out your policy.

Are there any exclusions?
There are exclusions in all types of payment protection insurance just as there are with any other type of insurance you might take out. Therefore you will have to check what exclusions your provider had put into the policy as they can vary with some including more than others in the policy.

For instance you do need to be working in a full time position and have been doing so for a period of not less than 6 months at the time of applying for your policy. You should also live in the United Kingdom, the Channel Isles or the Isle of Man in order to be eligible to take out any form of payment protection. These are just a couple of the most frequently found exclusions.

The different types of redundancy protection you could take out
Should you want a replacement income to be used as you wanted then you could take out income payment protection. The income from this cover could be spread out over your repayments just as you did with your own income. You might use a portion of it towards meeting your rent each month, your gas and electric bills and even your grocery bill for the month.

Loan cover will protect any loan repayments you have to make each month. This could stop you from falling behind on secured or unsecured loan repayments. Debt from these could lead to you losing your home if it secured against the borrowing or you could have bailiffs come into your home to take your possessions if you fall into debt with unsecured loan repayments.

Mortgage payment protection could be taken to go towards you being able to meet your mortgage demands each month. This is essential of course if you are to avoid having your home repossessed.

Why should I take out cover?
If you were to rely on being eligible to claim an income from the State then you could be let down. First you will have to be eligible to claim a State income and then you might not get the income you thought you could be entitled to and this could leave you struggling. If claiming an income towards meeting mortgage repayments then you will only get help with so much of the interest repayment. You will also have a wait of around 13 weeks on your hands before seeing any income from the State.

How to ensure you get a good deal
The cost of redundancy protection can vary so it is essential that you shop around for your policy. Standalone providers are generally the best way to make savings on your protection as the cost with the lender on the high street is usually way over the odds. With an independent provider you generally get more advice and information regarding the protection you are taking so you can check suitability.

The main benefits to taking a policy
Without something to fall back onto if you became unemployed through redundancy you could struggle to maintain your repayments and outgoings and even fall into debt and arrears with your repayments. With the redundancy protection policy you will have your chosen income coming into the home to be used towards your chosen repayments and outgoings. You will know when a claim could be made and for how long you could rely on the benefit if it was needed.

The dreaded envelope with a notice of redundancy is many worker’s worst nightmare, and it can have wider implications for people carrying certain debts and other commitments. Even people who are debt free or who have things such as rent and utility bills to pay can find some of the common ways of support, like the welfare state and redundancy payouts, completely inadequate. In exchange for a regular premium, it’s possible to get redundancy protection in Scotland, a kind of personal insurance which guarantees monthly payouts towards your general costs in the event you are let go by your employer.

Unless somebody has savings and investments big enough to keep them going for some time, a notice of redundancy normally means a race against time to get into a new job and to be earning again before the red bills start arriving and things become a significant struggle. Even those who get a redundancy package can expect an amount which might not see them through more than a few weeks or even less than that. This is why redundancy protection is an option for anyone concerned that one day they may be told they are no longer required by their employer.

Redundancy stresses

The problem with redundancy packages is that depending on someone’s age and how long they have been with a firm, they can be quite ingenerous and may not even be able to keep someone going for a month. Job seeker’s allowance is also typically quite inadequate when it comes to keeping up with all the regular commitments of a usual household. A redundancy cover deal, available from a wide variety of insurers, can provide an agreed monthly cash sum until someone is working again, and can payout for 12 months or longer on some policies. All someone needs to do is name what they would expect per payout per month, and it would be wired straight to their account after a successful claim.

A first payment simply arrives not immediately but 30 to 90 days after the claim has been approved, although some companies backdate payments to the first day someone lost their income. This waiting period can often be defined by the policyholder, and those who are prepared to wait as long as 90 days may find that their policy premium is cheaper than somebody waiting 30. Of course, the other deciding factor is how much someone chooses to insure, and someone who could expect a monthly payout of £700 per month after a successful claim would usually pay more than somebody who would get three or £400 per month.

Note that insurers place a top limit on how much they are prepared to insure, beyond which you won’t be able to protect any more of your income. Normally they either say you cannot insure beyond such and such an amount or a percentage of your current income. This is because redundancy protection in Scotland is not designed to replace your full working income, but to provide you with viable support until you can fend for yourself again. It will normally be enough to give you a significant helping hand with all the essentials, such as the rent, utility bills, and any debts. You are free to spend the money as you wish, and some people choose to spread them around a number of commitments.

Exceptions

While generally speaking you can expect to be able to claim having been made redundant, there are some important exceptions. For example, you can’t claim on this type of policy if you accept an offer of redundancy from your employer, you must have been made redundant forcibly. It’s also not possible to get wind of the fact that you’re going to be let go and then cover yourself with an insurance policy. For the cover to be valid, you must have no prior knowledge that your position is at risk.

Unemployment protection

Redundancy protection is also part of the payment protection insurance market, and as such is related to cover plans such as mortgage payment protection and credit card cover. All of these things provide somebody with short-term financial support in the event they lose their job through no fault of their own, while other deals protect against accident and sickness. While a typical redundancy protection policy does not protect against these circumstances, it’s often possible to add them on, perhaps for an extra fee.

With the search for a new job being difficult enough, the thought of quickly struggling with even the most basic regular home costs can make redundancy even harder for many people who are made redundant. Redundancy protection Scotland cover can provide viable support for those who end up unexpectedly in the job queue – it can prove not just a financial boost but also a psychological one as the payments are a route to a more sure footing until the policy holder is working again.

Redundancy protection can be your lifeline if you were to become unemployed through involuntary redundancy. Without it and you might have to struggle each month to find money to be able to put food on the table for your family, meet your mortgage or your loan repayments which is essential to keep out of court.

What exactly will the unemployment protection do?

Redundancy protection will supply you with a tax free monthly income while you continued to be unemployed for up to a certain period of time which will depend on the provider. Typically this is 12 – 24 months after unemployment.

When can a claim be made on the insurance?

How long you have to wait until you make a claim on your policy is subject to the individual policy terms and conditions. One provider may allow you to make a claim on your redundancy protection once the 30th day of unemployment had passed, while with other providers it might be as long as the 60th or 90th day before you will be eligible to make a claim on the policy. You should therefore check the wording of the cover before taking it out.
Also read the terms to find out if your benefit will be dated back to the first day that you became unemployed as some providers will do this.

How much money will I get each month?

You can choose how much of your mortgage or loan repayments or your monthly income that you wanted to protect. This amount will need to be agreed by the provider you choose to take out your policy with as all providers will state a limit on the amount.

As a rough idea you can typically insure up to £1,500 a month or half of your gross monthly income with the provider. This is the monthly amount you will receive in the event of a claim.

How long will the payments continue?

You might be given a payment each month for 12 months or your policy can provide you with an income for up to 24 months. Therefore you should check the small print of the policy so you fully understand how long you will benefit for.
Should the policy pay out over 24 months then it will cost more than redundancy insurance that paid out over 12 months.

Will you be eligible to take protection?

It is essential that you find out if you are eligible to claim on the insurance before actually buying your policy. There can be just the most common exclusions in the cover or there can be many depending on the provider.
For example, if you work for yourself then you will have to check the wording of the policy very carefully as usually individuals who are self-employed will have to cease trading on a permanent basis before they can claim. Typically, you will need to be living in the UK, Channel Isles or Isle of Man and you will have to be in a full time position and have been working for at least 6 months prior to the time of applying for your policy.

Other levels of cover you might consider

You can take out redundancy protection alone if you just want insurance against unemployment. However you can choose to pay a little more and have protection becoming unable to work due to incapacity, such as accident and illness, too. In this case you will be able to claim if you were to suffer from either of these events.
It is also worth mentioning that should you just want to insure against incapacity alone then you can take out cover solely for this.

The three types of redundancy cover

Redundancy can come in three forms. You can choose between mortgage, income or loan payment protection as your redundancy insurance. If mortgage outgoings are your biggest worry then the policy will provide an income that you can put towards your monthly mortgage payment.

Loan payment protection insurance will supply an income that you will be able to use towards your loan repayments. This will stop you from falling into debt and being faced with court.

Income payment protection insurance will provide an income towards any essential repayments you will normally have to make. This can stop you having to make changes to your lifestyle which will affect the whole of the family.

Why consider payment protection?

State benefits can be a bit of a letdown as first you will need to be eligible to make a claim for an income from the government. If you do and you want help with your mortgage then any help you might be entitled to will only be towards the interest on your mortgage repayment. You will also have to wait several weeks for this money to come through, by which time you could already be in arrears.

Any income you received towards essential outgoings might not match your own which can leave you struggling and you may fall into debt.

How to get the best deal on your protection

The best way to ensure that you get the cheapest policy is to shop around and compare the cost with standalone providers. By doing so you can make huge savings as high street lenders are well known for the high cost of their protection.

With an independent provider you can choose how much of your repayments or income you wanted to protect and this will reflect how much you pay for the protection.

Brief summary of the many benefits

• You can save on the cost of a policy if you shop around and compare the cost of premiums, making it an affordable option for anyone
• You will be able to choose how much to protect of your repayments or income
• Peace of mind that should you be made redundant, you will still have an income
• Your redundancy protection can be taken to cover your loan, or mortgage repayments or your essential outgoings in general.

Do you expect the State to provide unemployment assistance should you find yourself dealing with involuntary redundancy? This is a mistake because the government helps a small percentage of unemployed at the support is usually very little. You must look out for yourself and your family through the purchase of a redundancy protection policy. This is your best solution for financial security when you are displaced from work.

Redundancy protection takes the form of one of three common products that make up the payment protection insurance (PPI) sector. Mortgage payment cover is one product that serves as a home protection tool because it helps you keep up with monthly mortgage repayments. Loan payment protection helps with personal loan and credit balances which preserves your good credit rating. Income payment cover is a more general use type of solution that assists in meeting various financial responsibilities that do not go away because your job does. All three pay monthly benefits for a specified period of time while you are out of work.

Terms and conditions that create redundancy protection

Before investigating the other terms and conditions that make up the typical payment cover policy, you need to know whether you are eligible to receive benefits. To be able to collect benefits from a payment cover policy, you must be employed full time for at least six months. This removes part time employees and retired people from consideration. Also excluded are people dealing with a pre-existing medical condition. Why do you need to know? Though conditions have improved, many financial institutions long made a habit out of mis-selling payment cover to those people unable to collect benefits. You must be cautious.

Now that you have decided you are eligible for benefits, you need to be familiar with the issues that make the products what they are. First, what is the typical length of benefits payments? Most policies pay you benefits for either a 12 month period of time, or a 24 month period of time. This obviously affects you financially to consider how long you are able to collect payments while out of work.

The benefits starting point also varies from one policy to the next. Policies begin paying benefits at either 30 days after the insured event occurs, 60 days after the event, or 90 days after. This may not sound like a huge difference, but imagine going an extra month or two without an income payment. If you cannot afford to have such a gap, you might want to only consider plans that offer a 30 day after the event starting point for benefits.

Think about the maximum allowable cover you want also. Most policies allow you to protect up to £1500 or half the normal monthly income you earned, whichever is lower. Because the benefits are tax free, the amount that you actually have to use is much more significant. Some people that have savings or a severance pay may feel comfortable covering a smaller amount. This is not a good idea unless you are comfortable with your family’s financial situation when the unemployment arises.

Events you can cover with redundancy protection

Though we are talking about redundancy cover, most providers also allow you to protect accident and illness situations as well. A plan that covers against each is obviously more broad and protective. However, there are some cases where you might just want to protect against one event or the other.

Some employers already offer benefits during longer illness or disability scenarios which make it unnecessary for you to buy this protection. In other cases, you might need to buy the accident and sickness cover but you could decide to save money on your premiums by not protecting for involuntary redundancy. Why would you consider this? Actually, most people should not. But, if your savings and severance are good, or you are well educated and well skilled to quickly find new work, it might make sense. Otherwise, the best precaution is to cover each situation.

Another add-on protection that many providers include for free is carer cover. This benefit applies to situations where you must leave work to take care of sick or injured family members for an extended period of time. It is a nice extra cover to have in your policy for this particular event.

The best deal in the marketplace

There is no doubt that the best deal in redundancy protection comes from an independent insurance provider. This is a company that specializes in the insurance industry and is more knowledgeable and able to help than financial institutions, which has a broader array of financial pursuits.

Rates on plans from standalone providers are also much better. Loan payment cover is usually available for around ten times less cost from an independent versus a large bank. Mortgage cover is four times less costly. Income payment protection insurance is about five times less expensive.

The obvious question that comes up is why would anyone buy from a financial institution if their rates are so much more expensive? The sad reality is that consumers have long been unfamiliar with opportunities to buy payment protection in the open market. Only after a couple recent events did awareness improve.

The first major event that helped evolve payment protection was a move by the Financial Services Authority (FSA) in 2007, when it fined many well known high street companies it found guilty of mis-selling payment protection policies to those that are ineligible. The fines were a bit of a wake up call to providers and consumers.

The other major development was the 2005 Citizen’s Advice super complaint to the Office of Fair Trading (OFT). The complaint brought to light the mis-selling, but also the common bundling of loans and insurance solutions that led to pressure selling and deception. Many banks would essentially force their payment cover on unknowing borrowers despite the high costs. The OFT asked the Competition Commission to evaluate. It did, and as a result, several changes have been made. One change established a seven day ban on selling insurance to new borrowers.

There are three products that make up a portfolio of insurance products known as payment protection insurance (PPI). Collectively, these products are your best resources to gain redundancy protection. In the face of involuntary redundancy, your family needs to have some financial security. Through a modest investment in payment cover premiums, you can have that peace of mind. Do not wait around for assistance from the government. The State only assists a limited number of unemployed people and the financial support is usually very limited.

The three covers in the payment protection portfolio are loan payment protection, mortgage payment protection insurance, and income payment insurance. Loan payment cover helps you maintain a good credit rating by allowing you to manage your personal loan and credit card debts while you are out of work. Mortgage cover helps you preserve your most valued asset by enabling you to use your benefits to meet monthly mortgage obligations. The income payment protection product is useful for allowing you to manage various bills and other financial requirements.

Factors that are important to your best redundancy protection

The first major issue you need to address as you look in the market for payment cover is the length of the benefit repayment. Policies usually pay benefits over the course of either 12 months, or 24 months. Obviously, you need to know how long your benefits would last should a covered event occur.

The benefits starting point is also something that you need to give special attention to. This can be an important financial consideration should you need benefits. Typical policies begin to pay benefits at 30 days, 60 days, or 90 days after the insured event takes place. The difference between a 30 day and 90 day starting point is significant if you are on a strict monthly budget. Make sure you consider the potential gap in income if you were to take on a 90 day starting point in a policy.

Another thing you need to consider seriously is the amount of cover to buy. You are always in control of the amount of protection you take on. The maximum allowable monthly benefit varies among providers but is usually is the lesser of 1500 Pounds or half your normal monthly gross income. The benefits are tax free so this is a pretty significant amount of security. Some people do decide not to get the maximum benefit, though this is not a good idea if you are dependent on your income each month.

Before you really even address these critical policy issues, you need to make sure you meet the basic eligibility requirements for protection. You must be employed full time for a period of six months in order to get protection. This means that retired people and part time employees are not able to be covered. People with pre-existing medical conditions also are not eligible.

Additional coverage opportunities with redundancy protection

Your financial protection can be improved if you take advantage of the full array of covers with a payment protection policy. Along with involuntary redundancy, you can buy plans that allow you to add protection for prolonged illnesses or accidents. This is a great way to expand your benefit potential.

Not everyone wants the complete protection of both redundancy and accident or illness. Some employers already provide adequate insurance benefits for illnesses and injuries. Other people that do need this protection for accidents and sickness might decide to save on premiums by not taking on unemployment cover. This only makes sense when you have savings or other funds, and you are comfortable with your ability to quickly get a new job.

Along with a full cover policy for redundancy protection, you can sometimes find providers that add carer cover to your plan at no extra charge. This is a nice added event that pays the monthly benefits when you have to leave work to care for a sick or injured family member.

Comparing independent insurers and financial institutions

Independent insurance specialists and financial institutions are your two basic options for the payment protection products and redundancy protection. Independent insurance providers specialize in insurance products and usually have better expertise and offer more affordable rates. Financial institutions are banks that offer a variety of financial products. Their knowledge of insurance is usually less and they have also developed a reputation for poor service because some have pressured consumers in the past to buy their expensive policies.

Independent insurance companies have loan cover that is usually about ten times less expensive than loan protection bought from a financial institution. Mortgage cover is usually around four times cheaper. Income payment cover is about five times less expensive. These add up to great opportunities for savings on a plan.

Unfortunately, prior to a Citizen’s Advice super complaint in 2005, many consumers did not realize they had options to buy redundancy protection on the open market. Many banks packaged their insurance with loan products and pressured consumers into feeling obligated to buy the insurance to get the loan. This issue, and mis-selling of policies to ineligible consumers, were among the issues addressed by the super complaint.

The Competition Commission was asked by the Office of Fair Trading (OFT) to look into the issues in the payment protection sector more thoroughly. After a review, the Commission made several recommendations for improvements in the sector. Many of these recommendations have already been put into place. One of the resolutions placed a seven day waiting period on lenders who want to sell their payment cover products to new borrowers.

Along with the response to the issues by the Commission, the Financial Services Authority also did a favour to redundancy protection consumers by fining many leading high street companies it found guilty of mis-selling. The agency conducted its own investigation in the midst of the super complaint. Together, the moves by the Commission and the Authority changed the nature of the payment protection insurance sector by making consumers more aware of their options, and forcing banks to rethink their questionable selling practices.

Payment protection is your best option for unemployment protection should you face the hardship of involuntary redundancy, or prolonged accident or illness. The State offers little or no support during periods of unemployment, so you must take care of yourself and your family. With the security of a payment cover product, you can ensure that when you are left without a job income through displacement, you will still receive benefits payments to replace the lost paychecks.

Payment protection insurance (PPI) is a portfolio of solutions that actually consists of three standard insurance products. Mortgage payment protection insurance (MPPI) cover is a solution that is used to help you manage your home by keeping up with your monthly mortgage repayments. Loan payment protection insurance cover is intended to help you manage your credit by repayment of your personal loan and credit card balances each month. Income payment protection insurance cover is the third product that serves as a more general purpose solution to manage your monthly financial needs.

Basic terms and conditions of payment protection

Before exploring your options to purchase a payment cover policy, you must first understand the basic features that make up the policies. The length of the payout period is one major consideration in selecting a policy. Some policies pay benefits over the course of 12 months while others pay out for a 24 month period of time.

You must also think about the point at which benefits kick in. There is always a period of time after the insured event that must pass before the first benefits payment arrives. Some policies pay the first benefit 30 days after the insured event takes place. Others do not issue the first payment until 60 days or 90 days after the covered event. If you are on a tight monthly budget you might not be able to wait that long to get your replacement income benefits. If you have savings or other funds, perhaps you might have more flexibility.

Another important item to consider is the amount of cover to take out. The maximum allowable monthly benefit is 1500 Pounds or half the normal monthly gross income, whichever is lower. The benefits are tax free. Some people do not buy the maximum cover in order to save premiums. This is not a good idea if you need the fullest level of insurance protection.

Of course, before you even worry about these issues that affect the potential value of a payment protection solution, you must first know if you are eligible to collect benefits under the terms of a policy. To be eligible for protection, you must be employed full time for a period of at least six months. This excludes retired people and part time employees. People with pre-existing medical conditions are also not eligible to collect benefits.

The various protections of payment cover policies

The covered events under a payment protection product are involuntary redundancy and accident or illness. Many people opt for the best coverage by including each event in their plan. Sometimes, though, it might make sense to only take on cover for one or the other.

If your employer has adequate accident and sickness insurance, you might not need to include this event in a private policy. Others that do need to take on accident and illness cover on their own might decide against redundancy insurance. This might sound odd, but there are good reasons at times. Some people feel comfortable that savings or severance pay will be enough to take care of financial issues until they quickly find a new job opportunity.

Another benefit that many providers include for free with their protection policies is carer cover. This nice add-on protection could come in handy if you are forced to leave work to care for a sick or injured family member. It pays the same replacement monthly benefits as the other events under your protection plan.

Getting value in payment cover

Your best value in the payment protection occurs when you shop the market and compare policies and rates through an independent insurance specialist. Insurance specialists focus insurance products and are therefore knowledgeable about payment insurances. They also tend to offer the best service and support, not too mention much more affordable rates than financial institutions.

Financial institutions are larger financial product providers who deal in an array of financial instruments. Because of a more general purpose, financial institutions tend to have less expertise to help you get the best solution. Additionally, large banks are known for their expensive policies. For this reason, they long sold them through pressure selling or deceptions. Many would bundle payment cover policies with loans in order to compel new borrowers to take on the insurances.

The Citizen’s Advice filed a super complaint with the Office of Fair Trading (OFT) in 2005. This complaint brought to light this bundling of products that led to unfair practices for consumers. The complaint also addressed mis-selling of policies to those consumers ineligible to collect benefits. This was also a common practice among many of the financial institutions.

The OFT turned the payment cover sector over to the Competition Commission for further review. The Commission issued several recommendations for improvements. Most notably, the Commission placed a seven day waiting period during which lenders could not sell payment cover to new borrowers. This frees consumers to explore the market to get their best deal. The Financial Service Authority (FSA) dealt with the mis-selling of policies by fining many high street companies it found guilty in 2007.

When consumers do look into the open market for payment protection, what they find are much more reasonable premium rates. Typically, loan payment cover costs about ten times less when it is bought from an independent insurance specialist, compared to a financial institution. Mortgage protection is around four times less expensive. Income payment cover is about five times less expensive. With the combination of affordable premium rates and excellent service and support, great value is available and you should take advantage of this vital insurance protection.