Probably one of the most serious effects of economic recession is the rising tide of unemployment that inevitably follows in its wake. The trend in official figures is inexorably upwards and the consensus amongst most commentators is that the total number of unemployed with have passed the two million mark by the end of 2008 and could hit 3 million by the end of the following two years. With redundancies in almost every walk of life continuing to rise, more and more people could be in need of unemployment insurance.
A report in The Independent newspaper of the 24th of October 2008 reflected the commentators’ estimates of the relentlessly rising totals of unemployed in Britain and further predicted that workers in the following industries stood a less than 50/50 chance of holding on to their jobs: manufacturing; financial services; shop working; construction; hotels and catering; the media; and North Sea oil. In other words, very few sectors of the economy will remain unscathed.
Unemployment insurance could prove a lifesaver for any of those affected by such redundancies. In return for payment of a modest monthly premium and depending on the chosen insurer, the policy holder can cover anything up to a typical maximum of £1,000 a month, or 50% of his or her previously earned income, whichever is less, and thereby enjoy a replacement income until such time as alternative work can be found. If there is no return to work, such monthly benefits can continue to be claimed for up to a maximum of 12 months with most policies, although some will continue paying out for up to 24 months.
“Nearly two million unemployed would have been almost unthinkable this time last year” says Simon Burgess of British Insurance, “and with the number of redundancies rising at their current rate, unemployment insurance is something that should be considered by anyone currently in work, whatever their sector of employment. Redundancies in one sector will inevitably have a knock-on effect on several other areas of employment, as the general recessionary pressure is brought to bear on the economy as a whole”.
British Insurance is one of the leading independent providers of unemployment insurance. The product is widely sold as a package covering the additional risks of accident and sickness as well as unemployment, but a standalone financial safeguard against the loss of income inevitably following on from redundancy is especially useful in the present economic climate. Moreover, by limiting the cover to the risk of unemployment alone, it is possible to secure such insurance for an especially modest and affordable price.
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