If you have a debt such as a loan, mortgage or credit card and rely on your income to meet your monthly commitments you might want to consider taking out redundancy insurance. The policy protects you against loss of income due to involuntary unemployment.
If you were made redundant the policy will pay out a cash free sum for 12 or 24 months depending on the provider you choose. If you want complete all round protection for sickness and accident as well then you can approach your provider for this. You may be required to pay an additional premium for the added cover.
Once you find out about the redundancy you would not be able to submit a claim within what is called the deferment period. The typical time for most redundancy insurance plans is 30 – 90 days.
While the payment on the plan is designed to provide you with financial help, you should know that there are maximum limits on the amount of benefit you can receive. Providers will only pay a percentage of your gross income.
When it comes to applying for a policy, there are a few entry requirements to meet. You will need to be within the specified age limit, you must be a UK resident and in some cases you may be asked to prove at least six months employment history.
Another point to note with redundancy insurance is that there are often exclusions attached to these policies. Before you sign up, find out how or if any of the policy exclusions relate to you.
When applying for your policy you will find many providers on the market. If you want to secure the best deal, then you might want to obtain quotes from independent providers first. The stand alone policies carry a much lower premium than policies from high street providers.
According to The Times Online article in April 2009, the jobless total in Britain is more than two million and this is expected to pass the three million mark by the end of the year.
If you were to join the two to three million how will you cope? Do you have savings to rely on or state benefits to collect? If not a protection policy will be able to provide you with a replacement income.
There is no doubt that the economy is suffering and more and more employees are losing their jobs. You can protect yourself from the fallout of involuntary unemployment by taking out redundancy insurance. The policy will provide all the protection you need while you seek alternative employment.
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