You can choose to cover redundancy in the forms of mortgage, income or loan cover. Of course the type of policy you would choose would reflect on the payments and outgoings you have each month. For example if you were to have mortgage repayments that you need to maintain then you could take out mortgage payment protection. Should you have loan repayments to maintain from either a secured or unsecured loan then you could choose to take out loan payment protection. If your utility bills and rent are your main cause of concern then income cover could be more suitable.
Once you have chosen which form of insurance would be the most suitable you would then have to decide how much of your monthly income or your loan/mortgage repayments you want to insure. The provider will set a maximum amount that you would be able to insure up to so they will have to pre-agree to your chosen amount. The amount chosen and pre-agreed is the money that you get back each month for the term; tax free, should a claim have to be made due to unemployment. Some providers ask that you wait for up to 30 days before claiming while others could ask you wait for 90 days. Some will also date back your benefit to the first day that you became unemployed. Your benefit could continue for a period of 12 months or some providers may pay out for as long as the 24th month.
As the terms of the redundancy cover do differ greatly it is essential that you check the policy before you take on any form of cover. 90 days can be a long time to wait and it can be very stressful as you could be in mortgage arrears or loan debt by this time of 3 months. You also have to be aware that you would need to pay out more in premiums each month if you take on redundancy insurance that would continue to provide your income for 24 months. However also bear in mind that all policies will cease if you have to claim on it for up to its term.
Being able to cover redundancy alone is great, however you could want insurance against incapacity too and if you pay a little more in premiums each month you could have. In this case you could make a claim if you suffered from either of these events. Some providers will also include carer cover in the policy so you would have to check this in the terms. Carer cover can give enormous peace of mind as if one of your close family members were to become incapacitated you would be able to take the time off work to take care of them and your policy would pay your income. You would not have to worry where to get money from each month towards your repayments or outgoings and not have to pay to have a stranger come into the home to care for your loved one.
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