There are different types of redundancy insurance you can choose to take out and the most suitable choice for your needs would be the first thing that you decide when taking out cover against unemployment. You would have the choice of protection your mortgage repayments with mortgage cover, your loan repayments with loan payment protection or your essential outgoings with income payment protection. Your chosen policy could then be claimed on in the event of redundancy and it would provide you with a tax free income.
This income would be the amount of your loan, mortgage repayments or your income which was pre-agreed by the provider when you took out the policy. You would need to have been unemployed or incapacitated for a period of time which would usually be between the 30th and up to the 90th day from the first day of losing your income to one of the events covered. You might then be eligible to continue claiming on the policy for a period of 12 months or 24 depending on the provider. Should you be offered a policy that would continue for as long as the 24th month you would pay more in monthly premiums?
You would be able to decide on the events you wanted to protect. Redundancy cover would only provide you with an income should you become unemployed. You could choose to cover both events and pay a little more each month for the premiums and claim should you suffer either. It is also worth noting that you could take incapacity protection on its own. If you have chosen to take out your policy with a standalone provider then you could be able to claim on the policy in the event that you were to have to stop work to stay at home and take care of a close family member. Carer cover is offered by the most generous of providers so always check with the provider you are considering taking out the policy with.
Income payment protection insurance as your chosen form of redundancy insurance would supply an income which could be used in any way that you wanted. If you have monthly rent then you could use some of the income towards this to ensure that you did not fall behind on your payments. You could also put food on the table and have money for your utility bills. Loan protection would cover either secured or unsecured repayments and could stop you from falling into debt and being faced with a court appearance. Mortgage protection protects up to so much of your monthly repayment of your mortgage and could stop you from getting into arrears with your repayments.
Related Posts