Where would you be without your monthly income? For instance how would you pay your rent, your mortgage or loan repayments or even put food on the table for your family if you if you did not your income to rely on. A loss of income could be a possibility that should be given some consideration as you could be a victim to redundancy. If you have unemployment insurance to rely on you would have an income that could be used towards you meeting your repayments and outgoings.

To take out unemployment cover you would have to decide if you wanted mortgage, loan or income payment protection. You then have to choose how much of your mortgage, loan repayments or your income you want to cover. Your provider would have to agree to this amount and this is then the tax free income you would be able to claim back on your protection. Usually you could insure up to £1,500 or half of the gross monthly income that you bring home whichever amount was the least. There would a waiting period that you have to stand to before making your claim and this is generally between the 30th and the 90th day. This means you might be able to claim from day 30, or with some providers it could be 60 days and up to the 90th. You might be entitled to claim your income over 12 months or you could be entitled to claim for up to the 12th month with other providers.

You should consider that 90 days might be a long time for you to have to wait before making your claim as you could be in arrears with your repayments by that time. You would also have to bear in mind that if you could rely on 24 months of benefit, if you had to claim that long, then the policy would cost more in monthly premiums.

Unemployment insurance would only pay out in the event that you become redundant. If you want added security of being able to make a claim in the event that you were to become incapacitated then you could pay a little more in premiums and have the safety net of being able to claim due to a loss of income to either event. If you have chosen a generous payment protection provider to take your policy with you could also be eligible to make a claim if you should have to give up working to stay at home and take care of an incapacitated family member. However not all providers offer this so you do need to check the terms of your policy when taking it out to find out.

Finally always check the terms of your unemployment insurance to ensure that you could make a claim on the insurance. There are always some exclusions in a policy and checking them against your lifestyle is the only way that you can be sure of being eligible to claim. Any ethical provider would give you the information that you need to check these against your lifestyle.

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