Redundancy Insurance
With unemployment soaring, more and more people are thinking about redundancy insurance.
With public sector jobs in the firing line, and other industries facing cost-cutting measures, 2011 is looking bleak. So is it time you looked into redundancy insurance?
Redundancy insurance provides payments to you should you lose your job. More commonly known as payment protection insurance, it can protect your salary and mortgage payments if your job is lost due to redundancy.
There are different types of redundancy insurance. Mortgage Payment Protection Insurance (MPPI) is designed to cover mortgage repayments, and anyone with a mortgage should think carefully about taking one out. This policy can also be extended to include mortgage-related bills, such as endowments.
The maximum monthly benefit you would receive is around 65% of your salary.
You can take out an "unemployment-only" option with MPPI but an "accident and sickness only" option is available as well, should any unforeseen health problems occur in the future.
Voluntary Redundancy
The majority of mortgage protection plans do not include pay out if you take voluntary redundancy. Likewise, it will not pay if you resign, or are dismissed for gross misconduct.
If you take out the "accident and sickness" option as well, you should know that any pre-existing medical conditions will not be excluded from the policy.
Length of payment
Most people find they are able to secure another job within 12 months of being made redundant. For this reason, most redundancy insurance policies will pay you between 12 and 24 months before the cover stops.
Buying Redundancy Insurance
Mortgage Protection Insurance is usually offered out when you take out a mortgage, but can be bought from any bank, building society or mortgage provider. Many internet websites offered comparisons of different prices and plans, so it is worth shopping around.
Excess Period
This is the period after you are made redundant when a benefit will not be paid. Most mortgage payment protection insurance policies have no excess period, but taking this option means that your monthly premium will be less.
Initial Exclusion Period
When you first take out your redundancy insurance policy, there will be an initial period where you will not be able to claim. This is often 90 or 120 days, but can vary greatly between policies.
Income Protection Insurance
This is another way of guaranteeing income should you become redundant. Income Protection cover pays you a regular, tax-free income, should you be unable to work due to unemployment, injury or illness. This is ideal for those who do not have a mortgage. Policies will pay out for a maximum of 12 or 24 months.
If you have a dangerous job, then this will affect how much you pay into the plan each month. Also, if you are already suffering from a particular illness, then you may be exempt from this in your policy. Your insurance provider may decide to ask for a medical examination or GP report.
Loan Payment Protection
You may wish consider this if you have any loan commitments. Should you be made redundant (or become ill) the loan repayments will be covered up to around £1000 per month.
As you can see, when it comes to redundancy cover, there are many different types of plans and policies. Think carefully about what you need paying for should you become redundant. You may wish you seek advice from a Financial Adviser first.
"A great price with all the benefits I need for my family"
We compare the UK's top insurers
Why Compare with Us?
- Genuine income protection insurance comparison quotes available in seconds
- Compare over 40 leading income protection insurance providers
- We have over 15 years of income protection experience
... find out more
Product Reviews & Pricing
- Simply select your occupation and the cover you require
- Sit back and get an instant comparison of all the leading income protection insurers in the market
Our Services
- Income Protection Insurance
- Accident Insurance
- Mortgage Payment Protection Insurance
- Permanent Health Insurance
- Redundancy Insurance
- Accident, Sickness and Unemployment Insurance
- Income Payment Protection Insurance
Contact Us
If you have any questions or need help or guidance please call 0845 257 2197