Redundancy cover could be taken to protect repayments such as your loan or mortgage. You could also choose to protect your essential outgoings such as your utility bills and rent. You would choose the most suitable type of protection out of the three policies and then the amount you wanted to protect and receive back each month over the term of the policy.
The term of the policy could differ with some providers allowing a claim to be made on the insurance after the 30th day. However there are others that could state a claim cannot be made until day 90. Some might also date back your benefit to the first day of suffering redundancy so check the terms offered by the provider. You could then continue claiming your income over a period of 12 monthly sums of income or it could be up to 12 months with other providers. The income you get back from your policy would be tax free and would be the sum that you agreed to insure when taking out your cover. There would be a limit so for example if you were taking out income cover you might be able to protect up to half of your gross monthly income or up to £1,500 whichever amount was less.
When considering your policy you do need to bear in mind that if the term was reached as you had not found work within this time, your cover would still cease regardless of the fact of you still being unemployed. Also consider you would need to payout more in premiums if you could rely on your policy for 24 months as this would provide twice the protection, if needed.
Redundancy cover of course just protects against the possibility of you becoming a victim to redundancy. Should you want peace of mind of being able to claim in the event of incapacity then you could offer to pay more in premiums each month. You might be eligible to claim in the event that a family member became incapacitated and you had to take care of them. Carer cover is offered by some of the more generous providers but not all so you would need to check in the terms of your policy.
Finally be aware that there are always exclusions in all policies whether you take out loan, mortgage or income protection as redundancy cover. These exclusions would have to be checked against your lifestyle as they could stop you from being eligible to make a claim on the policy. Common exclusions that could stop a claim from being made include working part time, you would have to be in full time work to take out cover. You would also have to have been in a full time position for a period of time before applying. For example you would not be able to take out cover if you had only started work two weeks previously.
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