You have many choices to make when considering taking out unemployment cover. The first of these is which type of cover to take. You could choose mortgage or loan payment protection or income cover. All forms of protection can be taken out to protect your repayments or outgoings against the possibility of you becoming unemployed.
Once having decided which type of policy would suit your needs the most you then have to decide on the amount of your loan/mortgage repayments or your income you want to take cover for. This amount would need to be agreed by your provider as it would be the amount of tax free income that you would get back from the policy if a claim should have to be made. Of course there would be a period of time that you would have to be redundant before you could make a claim and this would depend on your chosen provider. Some will pay out on your income once you have stood to the first 30 days and with others it could be 60 days, some could ask you to wait for up to the 90th day before you make your claim. Once your benefit has begun you would be able to continue claiming each month you unemployed up to the term of the policy. With some providers this could be 12 months and with others it might be as long as 24 months.
While you might jump at the chance of having 24 months of income from your policy you would have to take into account that you would have to pay out more for the premiums. You should also give some thought to the fact that 90 days or even 60 could be a long time to wait before seeing any money.
While you can just take out unemployment cover to protect against the chance of you becoming redundant you might also want to pay more in premiums each month and be eligible to make a claim if you should suffer incapacity. If you then suffered an accident or illness you would also have the income you insured towards the repayments or outgoings you protected. You could also check the term of your policy to find out if you could claim an income in the event that you were unable to work due to having to stay home and take care of a family member who was incapacitated. If your provider is generous they would include this into your policy but not all do.
Always check the small print of any form of unemployment cover you are considering taking out as there will be exclusions in the policy. You would have to check these against your lifestyle so that you know you would be eligible to make your claim.
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