You might choose to take out unemployment protection in the form of income, loan or mortgage payment protection. You would then have security of an income that would go towards you being able to maintain your chosen repayments each month in the event that you were made involuntarily unemployed. You would know how much income would come your way, when it would begin and for how long it would continue.
The income you received back from your chosen policy is the amount you choose to protect. This amount is pre-agreed at the time of taking out the policy with the provider and is paid tax free if a claim has to be made. Your policy might pay out your income once you had been unemployed for a mere 30 days but you could have to stand up to 90 days without an income. You might get an income paid each month over 12 months or with some providers you could get an income each month for 24 months. Should you have the longer term to look for work then you would need to pay more in premiums. Whichever policy you chose to take it would cease if you were to have to claim for up term.
Income protection is the most versatile of the family of payment protection policies. You could use the benefit from your policy how you wanted. It would be just the same as when you were working. Loan repayments could be protected with loan payment protection. This policy would provide an income that goes a long way towards stopping loan debts from building up which could see the lender taking you to court. Mortgage cover would protect your mortgage repayments in the same way and help you to avoid losing your home to arrears.
Along with unemployment protection your provider might have been generous enough to allow you to claim on your policy if you needed to stop working full time to look after a member of the family. However not all providers include this so do check before taking the policy out. You could also offer to pay more and have incapacity protection included in with your policy. You could then claim on the policy if you should suffer from either of the events. You would need to have checked the terms and have weighed up any exclusions against your circumstances. The exclusions are what can stop you from making a successful claim so it is essential you know about them before taking on the policy. Some add in just the common exclusions while others could include many more so this should be weighed up too.
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