Archive for the ‘Unemployment Insurance’

Probably one of the most serious effects of economic recession is the rising tide of unemployment that inevitably follows in its wake. The trend in official figures is inexorably upwards and the consensus amongst most commentators is that the total number of unemployed with have passed the two million mark by the end of 2008 and could hit 3 million by the end of the following two years. With redundancies in almost every walk of life continuing to rise, more and more people could be in need of unemployment insurance.

A report in The Independent newspaper of the 24th of October 2008 reflected the commentators’ estimates of the relentlessly rising totals of unemployed in Britain and further predicted that workers in the following industries stood a less than 50/50 chance of holding on to their jobs: manufacturing; financial services; shop working; construction; hotels and catering; the media; and North Sea oil. In other words, very few sectors of the economy will remain unscathed.

Unemployment insurance could prove a lifesaver for any of those affected by such redundancies. In return for payment of a modest monthly premium and depending on the chosen insurer, the policy holder can cover anything up to a typical maximum of £1,000 a month, or 50% of his or her previously earned income, whichever is less, and thereby enjoy a replacement income until such time as alternative work can be found. If there is no return to work, such monthly benefits can continue to be claimed for up to a maximum of 12 months with most policies, although some will continue paying out for up to 24 months.

“Nearly two million unemployed would have been almost unthinkable this time last year” says Simon Burgess of British Insurance, “and with the number of redundancies rising at their current rate, unemployment insurance is something that should be considered by anyone currently in work, whatever their sector of employment. Redundancies in one sector will inevitably have a knock-on effect on several other areas of employment, as the general recessionary pressure is brought to bear on the economy as a whole”.

British Insurance is one of the leading independent providers of unemployment insurance. The product is widely sold as a package covering the additional risks of accident and sickness as well as unemployment, but a standalone financial safeguard against the loss of income inevitably following on from redundancy is especially useful in the present economic climate. Moreover, by limiting the cover to the risk of unemployment alone, it is possible to secure such insurance for an especially modest and affordable price.

Unemployment insurance is a type of policy that protects you if you are unable to work due to an involuntary reason. It is designed to provide you with a replacement income when your salaried income ceases to exist.

With this insurance policy in place you can expect to receive a tax free monthly income for up to 12-24 months or until you return to work if this is sooner.

While the income paid is called a replacement, it does not match your salaried income. Because of the maximum benefit levels attached to these policies, the income is normally a percentage of your gross income.

If your provider allows, you can opt to add on other specified involuntary incidents. For example if you are relatively healthy but accident prone, you can choose to be covered for accident and unemployment etc.

There are eligibility rules that you should take note of like the minimum and maximum ages, employment status and country of residence.

Even if your circumstances change after taking out your policy, you should inform the provider as change in circumstances could affect your cover.

When taking out your policy, there may be exclusions relating to existing health conditions for example. You will need to ask your provider for more details.

Things To Note When Choosing A Provider

First of all, if your mortgage or loan provider tries to sell you unemployment insurance, you do not have to take it. In fact, if you opt for a policy from an independent provider, you will find that your premiums can often be much lower.

Many high street providers will add the insurance on to their products and this can cost you a lot more over the life of the loan or mortgage.

Simon Burgess of independent provider British Insurance says ‘Providers often take advantage of the consumer by loading expensive protection policies to existing debts, but at British Insurance we provide low premium, high quality stand alone protection policies that rival the best in the industry’

The next thing to look out for is policy terms and conditions. Many providers do not take the time to explain how the unemployment insurance works so you should make it your business to get all the answers you need before signing up.

Once you know all there is to know about the policy, it will be much easier to evaluate the benefits and make a decision that is right for you.

Having unemployment insurance in place, is a sure way to protect yourself against the unpleasant things that can accompany involuntary job loss. You can avoid all the red letters, bad credit profiles, stress and worry with protection from involuntary unemployment.

Unemployment insurance would provide you with an income if you were to lose your own through such as involuntary redundancy. You can take out protection against unemployment for your mortgage or loan repayments or your essential outgoings depending on what your monthly financial commitments are.

You would take on a policy by insuring a portion of your income or up to an agreed amount of your monthly loan or mortgage repayments against the possibility of unemployment. If you were to be made redundant you would claim this amount back each month for the period of time set out in the terms and conditions by the provider.

One of the cheapest ways of taking out mortgage, loan or income payment protection is by purchasing it independently. Lenders will try to sell you loan or mortgage cover alongside the borrowing, however in the majority of cases this is one of the dearest options for taking on cover. You can save as much as 40% on mortgage payment protection and up to 80% on loan payment protection by going with a standalone provider. You would also get insurance that comes with no excess as the protection would be dated back to the day one of you being made redundant.

Standalone specialist provider British Insurance begins to provide you with an income after day 30 and then pays each month for 12-24 months, or when you get back to work, whatever event is sooner. . The policy would provide you with the breathing space to go out and find work without the worry of where you would get the money to meet your outgoings. Looking with other providers you might find that some will pay a benefit for just 12 months so you do need to read the terms of the cover before buying. You also need to check the small print of the cover to see when you can claim on it as there might be a deferment period of 90 days.

Unemployment insurance taken out as mortgage payment protection would provide an income towards continuing to meet the demands of your mortgage each month. This will go towards stopping arrears from occurring and this is essential. Mortgage arrears of just a couple of months and no way of making an agreement with the lender could see them taking you to court and this could mean you would be evicted.

If you have loan repayments to maintain then loan payment protection would help to stop you from falling behind on them. By ensuring that you would have the money to maintain your repayments you would also keep your credit rating in good order and this is needed if you wish to borrow again in the future.

Income payment protection taken out unemployment insurance would ensure you could meet all essential outgoings that need maintaining. The money could be used for anything from keeping the home warm to paying the grocery bill each month.

Unemployment insurance can take many forms, but for the purpose of this article, we’ll concentrate on the insurance that protects your income for anywhere between 12 and 24 months.

This policy can be linked to your mortgage but you don’t have to have a mortgage to qualify for one. It is designed to pay you a benefit if you were off work due to accident, illness or redundancy. These incidents are referred to as involuntary unemployment.

Premiums for these unemployment insurance policies can be quite low, but there is the exception of course. The main exception occurs if you approach a high street lender for your protection product as their premiums often tend to be more expensive than that of independent providers.

Features and Benefits of Unemployment Insurance

• The income paid is 100% tax free
• You can decide on the level of cover you want, just make sure you will be able to live comfortably on the benefit level you choose
• Some providers will allow you to choose which incidents you want to be covered for
• The cost of premiums can be directly linked to the benefits you choose
• The income you receive will cover a percentage of your salary and not the total amount
• Benefits are paid for a specific period: usually between 12 and 24 months.

Choosing Your Provider

When choosing the product, the cost of premiums are normally the deciding factor and as independent providers are normally cheaper, you might want to obtain a quote from a standalone provider.

One such company is British Insurance which can provide savings of up to 80% on premiums.

Another thing to note is the length of time you will be paid an income as this can vary among providers.

Summary

Having an unemployment insurance policy, will provide you with the peace of mind you need in the event you lose your job. You can avoid so many unpleasant situations like, bailiffs knocking at the door, repossession notices or red letters for medical bills.

Unemployment insurance can be taken to protect a pre-agreed amount of your loan or mortgage repayments or a portion of your income against unemployment. The sum you insured would be the amount you received back every month if you were to become a victim of redundancy and the money would be tax-free. When you take into account that redundancies happen frequently you do need to give some thought to how you would be able to maintain your financial commitments.

Mortgage repayments must be met each month, otherwise you are risking falling into arrears and the lender could choose to start court proceedings to take your home. With mortgage payment protection behind you as unemployment insurance, you would receive a sum of money towards being able to maintain your repayments. This would provide peace of mind which would allow you to search for work or to make a recovery.

Loan repayments also have to be met and loan payment protection would go a long way towards ensuring that you would have the money needed to be able to maintain them. If you were to fall behind with loan repayments you would see your credit rating affected and this can mean borrowing in the future would be very hard. You would also be risking the lender starting proceedings to take you to court to gain back what you owe and in the case of a secured loan you are at risk of losing your home.

Income payment protection would supply you with the money towards all of your outgoings each month. These could be anything that came into the home from paying for food to maintaining bills such as heating and lighting.

All forms of unemployment insurance can be taken out independently with a specialist payment protection provider. If you chose to get quotes from ethical leading payment protection specialist British Insurance you would make savings of as much as 40% on mortgage cover and up to 80% on loan payment protection. You would get cover that comes with no excess as the benefit would be backdated to the first day of your unemployment and you can make a claim from the 30th day. Once the protection had begun to provide you with an income it would do so for up to 12 months and then it would cease. If you chose to search with other providers you might find protection that would last for 24 months but you would have to read the terms of the policy to find out. You should also check to see when you would be able to make a claim on the protection. Some providers could offer cover that might not begin to payout until as long as the 90th day.

With redundancies happening to anyone you should give some consideration to taking out mortgage unemployment insurance. You can take out the protection to insure your mortgage repayments against the fact you could lose your income as a result of unemployment. You would insure up to a certain amount of your monthly mortgage repayment which would be pre-agreed with the provider at the time of taking out the cover and then claim this back if you were to lose your income to redundancy. The income would be tax-free and would go towards you being able to continue maintaining your repayments and perhaps avoid home repossession.

There is always a period of deferment with any provider and cover only pays out for up to so long before expiring so you would have to check the terms and conditions of any policy you were considering taking out. If you shop around with standalone payment protection providers you would be able to make the biggest savings and get all the information needed to determine if cover is suitable. Independent payment protection provider British Insurance offers protection that comes with no excess as it is backdated to the first day of you becoming unemployed and you can claim from day 30. Once you have put in a claim you would receive an income for up to 12 months. Other providers might offer mortgage unemployment insurance that might last for up to 24 months. You would also need to read the small print to see when you could claim on the protection as some providers ask that you wait for up to 90 days.

Mortgage unemployment insurance from British Insurance would come with few exclusions but other providers may add more. You would need to check these against your circumstances to ensure that the protection would be suitable before buying. British Insurance makes you aware of the exclusions on their website and once you have checked them against your circumstances you would have a back up plan on which to fall back on if needed. Mortgage payment protection is a far better safety net than relying on being able to claim benefits from the State. You would have to meet certain criteria to be able to claim and even if you are eligible the money you could claim towards your mortgage repayments would only be towards the interest part of the mortgage. Currently you would also have to wait for several months before you would see any money. At least with mortgage payment protection you would have a sum of money towards both the interest and the capitol repayment for the term of the policy.

When even government ministers begin admitting to plans for “the impact of higher levels (of unemployment)” it is clearly time for even those who once thought they had “secure” jobs to start worrying about how they might cope with redundancy and invest in some unemployment insurance. The minister in question was the Work and Pensions Secretary, James Purnell, who warned that although he would be reviewing the type of help available to those who were made redundant, the government was in no position actually to save their jobs, according to a report in the daily Telegraph on 9th October 2008.

“The days of a welfare state stepping in to bail out anyone facing financial difficulty are – for better or for worse long gone and it’s up to the individual to prepare his or her own defences” says Simon Burgess of independent specialist providers, British Insurance. “The government is unable to prevent anyone from being made redundant and even those who find themselves in that unfortunate position will have to wait at least 13 weeks – a good three months – before any government help with their mortgage payments, for example, might be available”.

Yet independent insurance providers like British Insurance can arrange personal unemployment insurance that effectively ensures there is no time-lag between being made redundant and receiving an alternative, replacement income immediately. Of course there needs to be a minimum period for which the policy holder is actually unemployed, so the insurance works like this: commonly, the minimum period of unemployment is 30 days (although this can vary from policy to policy, up to around 60 days). This is generally termed the “qualifying period” under the policy’s terms. Once the policy holder has been unemployed for longer than the qualifying period, the claim becomes payable.

At this stage, there is a further difference between the various unemployment insurance policies offered by different insurers. Those offering the best value will make the first payment of monthly benefits on the day immediately following the qualifying period but backdate the payment to the first day on which the policy holder became redundant. Other policies will offer benefits payable from the first day following the qualifying period only – in other words, the qualifying period is regarded as a form of policy excess, and any financial loss would need to be borne by the policy holder.

Most unemployment insurance policies will relate the maximum amount of cover available to the policy holder’s normal earned income. Typically, this is set at 50% of the normal earned income or a monthly benefit of £1,000, whichever is the smaller sum (the percentage or amounts differ according to the insurer). In each case, though, what helps to keep the premiums for such unemployment insurance so reasonable is the fact that it is intended for relatively short-term relief only (long enough for most people to find another job, in other words). Usually, therefore, the maximum period for the payment of unemployment insurance benefits is 12 months, although some policies offer an extended limit of 24 months (in return for higher monthly premiums).

You can choose to take out unemployment insurance to safeguard the repayments of loans, mortgage or essential outgoings and if taken with an ethical specialist provider you would be able to make the biggest savings. Loan payment cover taken from independent payment protection provider British Insurance would cost 80% less than if taken with the loan. Mortgage payment cover works out with savings of around 40%.

All forms of protection against redundancy can be taken out by insuring a pre-agreed amount of your loan or mortgage repayments or up to a certain amount of your monthly income, defined by the provider. Then if you were unlucky enough to become a victim of redundancy you would be able to put in your claim after period of time defined in the terms and conditions of the provider. The sum of money insured would be what you received back as your tax-free income and would go towards whatever payments you had chosen to cover.

If you had taken out mortgage payment protection the income you received would go towards ensuring that you would not be at risk of falling behind on the mortgage payments. Mortgage arrears can lead to you losing your home if you are unable to catch up on them. If you had taken out loan payment protection you would be able to use the sum given towards maintaining your loan repayments and not risk getting into debt and having your credit rating affected. The lender could also start proceedings to take you to court to recover what you owe. Income payment protection would give you the peace of mind by supplying you with an income towards servicing all of your essential outgoings while you searched for work. It could mean the difference between you struggling to stay on top of all your outgoings and being able to meet them without your redundancy affecting the whole family.

If unemployment insurance is taken with British Insurance you would be able to put in a claim after the 30th day of being made redundant. The benefit from the cover is dated back to the first day of you becoming redundant and then a payment is made each month you remained unemployed for up to a period of 12 months. If you looked around with other providers you would need to check the terms and conditions of their cover as some providers might offer to pay for up to 24 months. However you would also need to check to see when you would be able to make a claim as with some this could be as long as the 90th day of your unemployment.

Loan, mortgage and income payment protection are all policies that can be taken as unemployment insurance. You would take on the cover by insuring up to an agreed amount of your loan or mortgage repayments or your income. The sum of money that you insured would be paid to you as a tax-free income if and when you were to become unemployed by such as being made involuntarily redundant. It would allow you time to search around and find work again knowing that you did have some money coming in each month.

Mortgage payment protection insurance (MPPI) would provide the money towards keeping your mortgage maintained and this is essential if you do not want to fall into arrears with the mortgage repayments. If you were to fall behind the lender would want you to catch up on what you owe and of course you would still have to maintain your regular mortgage payment as well.

Loan cover would protect your credit file by supplying you with an income that goes towards you being able to service your loan repayments each month. If you were to get into debt with loan repayments and the loan was secured on your home then you would be at risk of losing your home. Unsecured loan debts might see the lender taking you to court to reclaim what you owe.

With income payment protection you would have a sum of money to go towards any bills that came into the home each month. This money could in fact be used for anything you wish and it might help you when it comes to putting food on the table and could come in handy for helping you to keep maintaining the utility payments.

Of forms of unemployment insurance can be taken for a premium each month which would be cheaper than if you had loan protection or mortgage protection added into the borrowing with the lender. Lenders charge way over the odds for the cover and British Insurance an ethical specialist provider could save you as much as 40% on mortgage cover and 80% on loan protection.

Unemployment insurance with British Insurance would pay your first payment from day 30 and would supply you with your income each an every month up until the 12th month, after this the policy would simply expire. British Insurance would also date back the protection to day one of your unemployment. Do check the small print if you decide to take cover with a different provider as some ask a deferment of 90 days before you can claim the benefit. You would also need to check for how long it would pay as this could be 24 months.

Unemployment insurance can be taken out to protect against the possibility that you might become unemployed as the result of being made redundant. You are able to take out protection to help you maintain loan and mortgage repayments and also to protect your income and general outgoings.

You take out unemployment insurance protection by insuring a portion of your repayments or income and then you would receive this sum back, tax-free if and when you had to make a claim. The money that you would receive back would go towards you being able to keep up with your outgoings and / or repayments depending on the type of payment protection against unemployment that you had decided to take out.

You can choose to take out protection for your mortgage repayments if this is your main concern. You would then be able to maintain them each month without fear of falling behind into arrears and do away with the possibility of you losing your home. If you want to ensure that you keep your credit rating in good order then consider taking out loan payment protection to be sure of not falling into debt with loan/credit repayments. If you need to consider all essential outgoings then look into taking out income payment protection. With this policy you would be able to keep paying any essential outgoings that come ito the home each month.

All types of unemployment insurance can be taken out with a specialist in payment protection. Ethical British Insurance for example would supply loan payment protection that could save you as much as 80% on the premiums. They would also help you to make savings of up to 40% on mortgage payment protection. Policies from them would begin to payout once you had been unemployed for a period of at least 30 days consecutively and the benefit would be backdated to the first day of you being unemployed. Once the policy has begun to provide for you it would continue to do so for a period of up to 12 months before it would cease. There are some providers that might payout for as long as the 24th months on the protection. You would need to look in the small print to find when the cover would begin as some providers could state that you would have to be unemployed for at least 90 days. You would also have to check the small print of the cover to ensure suitability.  There are exclusions which would need checking against your circumstances. British Insurance would provide this information on their website and providing you have checked suitability you can be sure that you have something to fall back on.