The most suitable choice of redundancy insurance would depend on what you have to pay out each month. Should you have the commitment of a mortgage then you could take mortgage payment protection. If loan repayments are a worry then you might want to take out loan payment protection. Income protection could be taken if you want to ensure that you would have the money coming into the home towards servicing your essential outgoings.
Whichever form of redundancy insurance you choose to take you would have to choose the sum of your repayments or essential outgoings you wanted protection for. This amount would have to be backed by the provider as this is then your monthly income if you were to have to make a claim. If you are taking out income cover the provider might allow you to insure up to half of the gross income you bring home each month or up to £1,500 whichever amount was the least. You could have to wait for up to 30 days with some providers before making your claim and with others the wait could be up to as long as the 90th day. Some providers could pay out for example on the 60th day of your redundancy. If you needed to claim then you might continue receiving an income for up to 12 months or it could be as long as the 24th month. However if you did have to claim up to the term the policy would cease when it reached it.
Mortgage payment protection can stop you from falling behind on your mortgage repayments which is essential if you do not want to risk losing your home. Income cover can stop you from having to make drastic lifestyle changes. Loan cover could allow you to continue meeting demands of your secured or unsecured loan.
As the name would suggest redundancy insurance as payment protection only protects against the possibility of a loss of income due to unemployment. If you want to add in cover against incapacity then you would need to pay a little more in premiums each month. You could then claim on your chosen form of insurance should you suffer from either of these events. If you have chosen a very generous provider to take out your insurance with then you could be entitled to make a claim if you were to have to give up full time employment to stop at home and take care of a family member. Carer cover is included sometimes with your standard protection but you would have to check with the provider at the time of taking out the policy.
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