If you became a victim to redundancy you would still have to find money to continue meeting your loan repayments, mortgage repayments and even your essential outgoings such as your rent and utility bills. If you had taken out redundancy cover then you would have an income to continue meeting the repayments you had chosen to cover.

Once you had decided which form of redundancy cover would be the most suitable you then have to choose how much of your income or repayments you want to protect. The provider would have to agree to this amount and this is then the income that you get back if you should have to claim on your policy. The income would be tax free and would be paid once you had been unemployed for a period of time. With some providers you might be able to claim once the 30th day has passed, with other providers you might be able to claim after the 60th day and with some it could be up to the 90th day before a claim could be made. You would also have to check to find out how long you might be able to claim your benefits as with some providers this could be 12 months and with others it might be 24 months of monthly payments. After this period of time your benefit would cease, if you should have to claim for this length of time of course.

You do have to bear in mind that any form of protection against redundancy would have to be checked against your lifestyle before taking it out as there will be exclusions in the protection. There could be just the most frequently found exclusions or there could be many exclusions so you would have to compare them. You would need to be in full time work and have been in work for a period of time before taking out your cover. You should also be living in the UK, the Isle of Man or the Channel Isles before you would be eligible to make a claim.

While redundancy cover could be taken just to protect against unemployment alone you might also want to consider the possibility that you could lose your income to incapacity. You could pay a little more in premiums each month and then make a claim if you were to fall victim to either of the events. If you have chosen a generous provider to take out your policy with then you could also be eligible to make a claim if you had to stop working to take care of a family member who became incapacitated. However as not all providers are generous enough to provide you with this extra form of protection you would need to check the terms and conditions at the time of taking out your policy.

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