You could take out one of the three forms of redundancy protection to ease potential financial stress if you suffer a loss of income. The monthly tax free from your policy would help you maintain your repayments for a loan, mortgage to day to day living expenses, if you face involuntary redundancy. For example you would be able to take out mortgage cover if you have mortgage repayments to keep up with each month. You might choose to take out loan cover so that you could maintain loan repayments. Or income protection could be taken if you want to ensure you would be able to keep up with your essential outgoings. Any of these forms of protection would pay out an income in the event you became redundant or could not work due to incapacity.
The first choice when taking our redundancy protection is the type of insurance needed. The second choice is how much of your repayments or income you want to protect, up to a certain amount. The provider pre-agrees to your chosen amount and this would then be the income paid back if a claim was made. You might have to wait for up to 30 days before claiming or you could have to stand to the first 60 or 90 days. Some providers will date back your income so this would need checking at the time of taking out the policy. You might be able to claim an income each month you remained unable to work or unemployed for up to 12 months. With some providers you could have an income that would continue for up to the 24th month if it were needed. This would have to be checked when you apply for your policy.
You could take out your chosen type of income protection to protect against incapacity and unemployment together. You could protect just against redundancy or you could choose to take protection just for incapacity if this were more suitable. There is also protection called carer cover and this is included by some of the more generous providers. If you have carer cover in your policy then you should be able to make a claim in the event that you have to give up working full time to take care of a family member. However, only the generous provider would include this in the standard policy so you do have to check.
Any form of redundancy protection will have some exclusions in it even if they are only the most frequently found exclusions. For instance you will have to be in full time work, not working part time as this would mean you are ineligible to take the policy. You should also live in the UK, Isle of Man or the Channel Isles. You would also need to have been working for a period of time at the time of taking out your policy which would generally be in the region of 6 months.
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