Archive for the ‘Unemployment Cover’

Time could be running out for many consumers to get their hands on a particularly useful, if not indispensable, piece of protection against the ravages of increased unemployment. As the growing number of redundancies follows in the wake of the deepening recession, some insurers are taking the view that the risks are becoming so great and the number of claims so unacceptable that they are simply withdrawing unemployment insurance policies from the market. The message seems clear, therefore – get unemployment cover while you can.

News of the somewhat drastic measures taken by some insurers to avert their losses by withdrawing the product was broken in a report in The Independent newspaper on the 2 November 2008. This revealed that one of the country’s largest companies, Norwich Union, has withdrawn such policies from the market amid fears that other insurers could follow suit.

The retreat from such business is viewed with some alarm, since unemployment cover is designed to provide anyone with a job at the moment with enough of an income to live off if they find themselves made compulsorily redundant. The benefits of the insurance policy then payable should provide adequate income until alternative employment can be found.

Although the details of each policy differ from insurer to insurer, it is generally possible to insure up to 50% of the current earned income, or £1,000, whichever is the lower figure. In the event of redundancy, benefits are then payable each month until the policy holder secures another job or for up to a maximum of 12 months – and some insurers will even offer the option of extending this maximum period to 24 months. In either event, of course, such a dependable, regular source of alternative income during a period of enforced unemployment can make all the difference between managing to get by or falling into crippling debt and financial problems.

Consumers who have already purchased unemployment insurance are widely expected to see their policies continue to be honoured – and not cancelled – by the issuing insurer. But the message to anyone who has so far failed to arrange this simple and currently very affordable cover is crystal clear – buy it while you can.

One of the leading independent insurance providers of unemployment cover is British Insurance and their managing director, Simon Burgess, assures anyone still looking to buy such insurance that: “we are still in the business of arranging this type of cover and will ensure that policies written now continue to be honoured in the event of the policy holder’s unemployment.”

While you are employed you may not appreciate the need for unemployment cover, but if you were to lose you job, you will quickly see how important it is to have a replacement income to fall back on. The thing is, if you wait until you are out of a job to purchase your cover; it may be too late to reap the benefits that the policy could provide.

Unemployment cover is a type of protection policy that will pay you a monthly income if you are unable to work due to involuntary redundancy.

The income is paid free of tax and can last as long as 12-24 months. Most products are linked to mortgages and loans and the first priority will be to pay towards these debts. Depending on the type of policy, there may be extra cash left over for related expenses.

Although the income can be seen as a replacement, you should know that the benefit level will not cover your entire salaried income. Due to the restrictions of maximum benefit levels, the provider will only pay a percentage of your gross salaried income.

Main Benefits

The tax free cash can be used to keep your mortgage instalment or rent up to date and this will help you keep a roof over your head. You will not have to face creditors at the door or on the phone and your credit profile will remain in tact.

Generally you will have the peace of mind you need to find another job. Just knowing that your lifestyle will be maintained in the event of job loss is enough to consider protecting your income.

A Note About The Cost

Not all providers will offer you fair benefits for the premiums, in fact if you purchased your product from your loan or mortgage provider or a high street company, your premiums will be high.

Instead you might want to obtain a quote from an independent company as they are guaranteed to have lower premiums.

British Insurance is one such independent company that can provide huge savings on premiums. As an example, you can save as much as 80% on loan insurance with this company.

Another Thing To Note

In the past, the Financial Services Authority (FSA) in collaboration with the Office of Fair Trading (OFT) was forced to fine high street providers after consumers complained of mis-selling. The providers were not taking the time to explain the policy terms to the clients and when the consumer tried to make claims they often found the policies were useless.

You can avoid being a victim by reading the terms and conditions of your policy and by getting clarification on any detail that you are unsure about.

Once you iron out the finer points of unemployment cover, you will see that this policy can be very useful for keeping you financially stable while in between jobs.

Unemployment cover consists of three different forms of payment protection insurance taken out to protect against the possibility of falling a victim of redundancy. As redundancies can happen at anytime you would be wise to give some thought to protecting against the unknown if you have mortgage or loan outgoings to maintain and of course essential outgoings.

A policy can be taken out by protecting a pre-defined amount of your loan or mortgage repayment or your income against unemployment which you then claim back if you are made redundant. A policy pays you the sum of money insured which would provide you with security which brings peace of mind that allows you to find work again.

You would have to stand to a period of time before you put in your claim and this would depend on the provider you chose to cover unemployment with. If you chose to protect with ethical leading provider British Insurance a claim can be made from the 30th day and they back pay on the policy to day one. You could also choose to cover yourself for 12 or 24 months depending on the level of protection you want. Other providers might state you wait for 90 days so checking terms and conditions are essential.

If you have mortgage payments to finance each month it is imperative you keep up with them regardless of your circumstances. Mortgage payment protection would allow you to do just this even if you lost your own income. The sum you chose to insure of the repayment which of course would be pre-agreed upon with the provider when taking it out, would go towards keeping up to date with the mortgage repayments. Cover could stop you from falling behind into mortgage arrears and this is essential as arrears can lead to you losing your home.

Unemployment cover taken in the form of loan payment protection would protect the repayments of your loans. You need to do everything possible to keep the repayments up as falling behind could mean the lender taking you to court and of course your credit rating will be affected at the same time. Your credit rating is valuable if you wish to borrow anytime in the future.

Your essential outgoings which might include putting food on the table and paying utility bills can be protected with income payment protection. Without a policy to support you through unemployment you might have to make changes to your lifestyle and those around you which could make life intolerable.

All forms of Unemployment cover offered by providers have exclusions in the terms of the cover. These need time taken over them to check that you would be eligible to take out cover. However if you choose ethical British Insurance you would have the information to check and they add in just the most common exclusions.

As the country slides ever more certainly towards an indeterminately lengthy recession, most analysts predict that the nation’s total unemployed figure will pass the 2 million mark before the end of this year. Quite how many jobs will be affected, of course, remains to be seen, but recent press reports – The Guardian on 14th September 2008, for instance – have suggested that up to a further 500,000 jobs could be axed during the coming two years. It’s not surprising, therefore, that many employees are running for unemployment cover.

How are they taking cover? They are taking the simple and extremely cost-effective expedient of purchasing redundancy protection by way of income payment protection insurance. This is a very popular and widely-sold form of insurance which pays out a predetermined replacement monthly income in the event of the policy holder being made involuntarily unemployed.

It is frequently packaged together with accident and sickness insurance, which pays out the same benefits if the policy holder needs to take time off work because of an accident or ill-health. However, it is just as easy to buy the unemployment cover as a standalone policy and reduce the premiums otherwise payable for the combined insurance by roughly 50%. This makes unemployment cover a particularly affordable option.

Not only cheap, it works in an especially simple way too. If the policy holder is made compulsorily redundant, there follows a reasonable “qualifying period” to establish whether or not this is likely to incur financial loss. The qualifying period can be as short as 30 days under some policies or as relatively long as 90 days under others. Once the qualifying period has been passed, however, the cover’s benefits become payable. With the best of the policies, these benefits are then backdated to the first day on which the policy holder was out of work; with others, the qualifying period is regarded as an effective policy excess and the benefits become payable from the first day immediately following that period.

The actual amount of unemployment cover can be tailored to suit the individual policy holder’s needs (and pocket), depending on the level of replacement income likely to be needed. In most cases, the maximum will be limited to 50% of the normally earned salary or £1,000, whichever is the lower amount, although these limits will of course vary from insurer to insurer. Depending on the policy chosen, the insured benefits will then be payable for a maximum period of 12 months (with an option of increasing this to up to 24 months with the more expensive types of policy), but either way, for a period almost certain to cover the time taken to find and secure alternative employment.

One of the market leaders in the provision of such unemployment cover is a company called British Insurance. Their managing director, Simon Burgess, says: “the economic future for this country looks pretty bleak and there will be hundreds of thousands of casualties amongst those who lose their jobs as a result of the recession. It makes a great deal of sense to prepare for the worst now by taking out some affordable unemployment cover“.

Being forced into unemployment can be very stressful for most people. Besides the loss of your job security and livelihood, you could also face financial difficulties that could take you years to recover from. You can avoid the disaster of involuntary redundancy if you were to protect your income with unemployment cover.

With this type of insurance you will be paid a monthly income for between 12 and 24 months if you are forced to leave your job due involuntary redundancy.

This type of policy could mean the difference between survival and poverty. You may be able to receive handouts from your family or from close friends, but what will you do when that resource is exhausted?

If you want peace of mind then you will need to protect your income:

Why Consider Unemployment Cover?

• The income you receive will be tax free and all yours to do with as you like
• You have the choice of how much benefits you want to be covered for
• You can even choose the incidents you want to be covered for and add on additional eventualties e.g. sickness and accident only or sickness and redundancy
• You will be able to maintain your monthly payments while in between jobs

Things to Note

• The benefits of the policy does not pay the full amount of your salary as there are maximum benefit levels that apply
• There are often exclusions incorporated into the terms so be sure to match your circumstances against the policy conditions
• The policy can be directly linked to named expenses such as loans or mortgages

Choosing A Provider

There are many products on the market which offer pretty much the same benefits. In a case like that the choice of provider may be based on the cost of the premiums. If so, you should know that if you shop at an independent provider, you are more likely to get your protection product for a much lower premium

Independent companies like British Insurance will offer great savings on premiums. Managing Director, Simon Burgess states ‘We don’t believe in charging customers more than they need to pay. As an ethical company, we strive to provide value for money to our consumers’

Summary

In today’s volatile job markets, having unemployment cover is a wise move to make. You never know what will happen, but if you were to lose you job, won’t you prefer to have an insurance product in place to take care of your monthly bills until you return to work. When you see the benefits you can receive, there is no reason not to consider protecting your income.

Unemployment cover can be taken to insure against the possibility that you might become redundant sometime in the future. You can take out protection for loan or mortgage repayments or you can ensure that you have money towards your essential outgoings. You would insure a portion of your income or a pre-agreed amount of your monthly mortgage or loan repayment against redundancy and then claim this sum of money back as a tax-free income if you fall victim to unemployment.

If you had chosen to protect your homeowner loan repayments with mortgage payment protection insurance (MPPI) you would then have money coming in towards being able to maintain your mortgage repayments for the term of the policy. This would go towards ensuring that you would not fall into arrears and be at risk of repossession.

Loan repayments could be maintained with the help of loan payment protection. You would have money towards meeting the repayments which would help to ensure that you did not fall behind on the payments and would also keep your credit rating in good order.

You could get a sum of money towards all of your essential outgoings, whatever they might be, with income payment protection. This sum of money could be used towards keeping the home warm and lit and would allow you to continue putting food on the table. You would not have to juggle bills around or worry about making cutbacks.

All types of unemployment cover are typically cheaper if you choose to buy the policy independently as opposed to having it added into the mortgage or loan. With standalone payment protection specialist British Insurance you could save as much as 40% on mortgage cover and 80% on loan payment protection. There are many advantages to choosing your protection with ethical independent British Insurance. You get protection that comes with few exclusions and no excess as the protection is dated back to the first day of your unemployment. You would get an income from the 30th day and then receive a sum of money for 12 months if it was needed for that long.

Other providers could differ in their unemployment cover terms with some stating that you have to remain unemployed for up to 90 days before claiming. You would need to read the terms and conditions before taking out the protection to find this out and also to find out how long you would be able to benefit as some might offer 24 months cover. When looking at the small print also check to find out what exclusions other providers add into the policy. These have to be checked against your circumstances in order for you to determine if protection would be suitable for your circumstances.

Unemployment cover can be taken out by insuring up to a pre-agreed sum of your loan or mortgage repayments or a portion of your income which would defined by the provider in their terms and conditions so that should you lose your job via involuntary redundancy, you would still have some form of income. The sum you insured against would be the amount you received back as a tax-free income if you had to put in a claim on the policy. You could choose to take out mortgage, loan or income payment protection depending on your circumstances and the outgoings you have to make each month.

Mortgage payment protection insurance (MPPI) would go a long way towards ensuring that you would be able to keep on top of your mortgage each month. Falling into arrears of just a couple of months would mean that you would be at risk of losing the roof over your head if you are unable to catch up. The income from loan payment cover would go towards you meeting the commitment of your loan borrowings and so ensure that you maintain your current credit status. If your credit rating was affected by missed payment you would find borrowing in the future to be almost impossible as no lender would want to take a risk on you. You would of course also have to pay back the lender any debt that you fell into account through missed payments. Income cover would provide you with some income towards being able to continue financing any essential outgoings that have to be made each month.

All forms of protection can be taken out with an independent payment protection provider and this is one of the biggest ways to make savings on the protection. If you get a quote from ethical payment protection specialist British Insurance you would save around 40% on the cost of mortgage cover and 80% on loan payment protection. You can also make the biggest savings when taking out income payment protection.

Your unemployment cover with British Insurance would begin to provide you with an income after the 30th day of your unemployment and the protection would be dated back to the first day that you were made redundant. With ethical British Insurance you would receive an income for as long as the 12th month and then the cover would just cease. If you were to shop around with other payment protection providers you would have to read the small print in the protection as some providers might continue paying out for up to 24 months. You would also need to check the terms as some of the providers might ask that you wait for anything up to 90 days before you would be able to claim.

As no one can say that their job is safe everyone in full time employment should give some thought to taking out unemployment cover. You would be able to take loan, mortgage or income payment protection depending on your needs and all forms of cover are typically cheaper with an independent payment protection provider.

You would take out your protection by insuring up to a certain amount of your loan or mortgage repayments or a portion of your income and then get this sum of money back as a tax-free income if you had to make a claim on the policy. If you are made redundant you would be able to claim on the cover from between the 30th and the 90th day after the event, depending on the provider. If you chose to take out cover with ethical standalone payment protection provider British Insurance this would be from day 30 and they would then pay you each month for up to 12 months. There are some providers that could offer to pay you on the protection for up to 24 months so you are encouraged to check out the small print when looking around.

You would also need to check the terms to find out what exclusions are in the unemployment cover. Some providers could put in many exclusions while others such as British Insurance would add in just the most basic few. Once you have checked the exclusions against your lifestyle you would then have cover that could be relied upon if and when you make a claim.

Mortgage payment protection can be very valuable protection to have in your corner as the sum of money that it provides would give you the income towards continuing paying your mortgage each month. If you should fall into mortgage arrears you would be at risk of losing your home. The lender could take you to court if you cannot agree to pay back what you owe while also continuing to pay your regular mortgage instalments.

Loan cover would supply you with the money towards your loan repayments and this is also essential if you want to keep your credit rating in good order. It would also ensure that you would not be at risk of falling into debt and of the lender starting court proceedings to claim back what you owe.

Income payment protection taken as unemployment cover would allow you to be able to maintain all of the essential outgoings that came into the home while you looked around for work. You would not have to worry about making drastic changes to your lifestyle or worry about having to juggle bills in order to make ends meet.

Unemployment cover can be taken out in the form of loan, mortgage or income insurance and would protect against the possibility that sometime in the future you could lose your income as the result of redundancy. If this happened then of course you would have to still be able to maintain your essential outgoings. Without an income to fall back on this would be a nightmare when it came to finding money for the bills.

You could take unemployment cover with a standalone provider for far cheaper than you could take it with the lender. Mortgage cover taken to cover redundancy could cost as much as 40% less and loan payment protection up to 80% less. You would cover a portion of your repayments or income which would be pre-agreed when you took out the protection and then fall back on this sum which would be supplied as a tax-free income if you had to put in a claim.

British Insurance would supply your payment protection after the 30th day of unemployment and would back date to day one of you being made redundant. The cover would then be paid each month you remained unemployed for a period of 12 months and then it would simply expire. There are some providers that might continue to payout for up to 24 months and some might ask that you defer from putting in a claim until as long as the 90th day.

If you have mortgage repayments to service then you need to give some thought to taking out mortgage payment protection. This policy would go towards you being able to maintain them and ensure that you do not fall behind into arrears. Mortgage arrears are a huge worry for anyone that has to keep maintaining payments for many years and a protection policy could go a long way to keeping the lender from seeking repossession if you were to fall behind.

Loan payment protection to cover your redundancy would help you to service the repayments of your loans and/or credit cards. You would not have to worry about falling into debt with the payments and having your credit rating affected. You would also not have to worry about the lender taking court proceedings to claim back what you owe.

Unemployment cover can also be taken out as income payment protection. This would allow you peace of mind for all your essential outgoings. You would be able to keep up with any repayments that you have to maintain each month in order to keep the home running smoothly and your family happy and looked after.

There are three main types of unemployment cover  that could be given some consideration to protecting your repayments each month. They would all protect against the possibility that you might become unemployed due to such as being made unexpectedly redundant. Loan, mortgage and income protection can all be taken out with an independent payment protection specialist and this is how you can make the biggest savings.

All payment protection insurance policies taken with ethical provider British Insurance would allow you to insure a pre-agreed sum of money and this money would go towards you being able to keep up your repayments each month. If you were to take out loan payment protection this would provide you with a sum of money towards your loan and/or credit card repayments. It would ensure that you would not fall behind into debt with any repayments and have the lender taking you to Court. If you do miss repayments then at the very least your credit file would be affected and borrowing in the future could be very hard. In the worst case if the loan is secured on the property then you would be at risk of losing your home.

Unemployment cover in the form of mortgage payment protection would allow you to protect up to so much of the monthly mortgage repayment you make and you would then use this to go towards your repayment which helps to keep the roof over your head. If you were to fall behind on the repayments and then not be able to catch up the lender could take you to court to repossess and you could be evicted from your home.

Income payment protection can be used towards your payments in general. This would ensure that you are able to finance any repayments needed and so not have to make changes to your lifestyle to be able to keep up with them.

Unemployment cover from standalone specialist British Insurance would begin to payout once you have reached the 30th day of being unemployed. The benefit would be backdated to day one of you being unemployed and would carry on providing the policyholder with an income for up to 12 months. There are some providers that could state you need to wait for up to 90 days and some might extend the payments for up to a maximum of 24 months. To ensure suitability if payment protection it is essential to check the small print, in particular the exclusions that are to be found in all policies. Ethical providers such as British Insurance will make this information available on their website.