Redundancy protection could greatly ease your unemployment as it would provide you with benefit each month towards the repayments that you had chosen to protect. You could cover your mortgage repayments, loan repayments or you general outgoings depending on what you have to pay out each month.
To take out protection you need to choose how much of your income or repayments you want to protect. This would be up to a percentage of your income, usually up to £1,500 or half of your gross monthly income whichever was the least, or up to a certain amount of your loan or mortgage repayments. Your provider would have to agree to your chosen amount and it is the tax free income that you would get back each month for up to term if you needed to make a claim. There would be a deferment period that you need to stand before a claim could be made and this is dependent on the provider. With some it could be 30 days, with others 60 and up to as long as the 90th day with others. You might be able to claim on your policy for up to a maximum of 12 months with some providers and with others it could be up to 24 months.
When considering an unemployment insurance policy you would have to ensure that you would be eligible to take out cover. There are exclusions in a policy that you would have to check against your lifestyle. Some providers could include just the most basic exclusions while others could include many more. For instance you would have to ensure that you are in full time work and you would need to be in full time work for a period of at least 6 months before applying for your policy. An ethical provider would ensure that you know about the exclusions and provide you with the information needed to check.
While you can take out redundancy protection to just protect against the possibility of unemployment you could also consider paying more in monthly premiums and this would give you security against incapacity too. Also check the terms to find out if your provider would pay out in the event that a loved one became incapacitated and you had to stop working to take care of them.
With redundancy protection by way of mortgage cover you would have a substantial income coming in that would go towards you being able to keep the repayments of your mortgage up to date. You would also have an income towards your loan repayments if you chose loan payment protection. If you wanted to be able to spread out your replacement income over any outgoings then you could take out income cover.
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