Understand what a redundancy insurance policy can do for you
- 21ST NOVEMBER 2007
If you want the peace of mind and security that a redundancy insurance policy can give then you have to understand what the cover can do for you and whether it is suitable for your circumstances.
Redundancy insurance cover provides a tax free lump sum to cover your lost income should you be made involuntarily redundant.
There are exclusions in all policies which can stop you from being able to make a claim against a policy with some of the most common being if you are retired, self-employed, suffering an illness which is ongoing or if you are only working part time. There can be others and these will be found in the small print of the particular policy but you have to read and understand them otherwise it could be just a waste of money.
Providing you have read the small print of a redundancy insurance policy and have determined that the cover would be suitable then it could begin to pay out from between the 30th and 90th day of being out of work and this is dependant on the particular provider you choose to go with for your cover. If you take a policy from standalone specialist British Insurance then your policy would start to give you an income from day 31 and then continue giving a tax free income which eases your finances if you come out of work through redundancy.
Mortgage cover can be taken as a redundancy insurance policy which means of course that you can continue meeting your mortgage repayments, ensuring you wouldn’t get into arrears. If loan repayments are your main concern then loan payment protection can give cover your monthly loan repayments. If you want to insure your monthly income up to a certain amount each month against redundancy then income protection would be a good choice. Again all are dependant on the exclusions.
British Insurance can save you up to 80% on your loan payment protection and 40% on mortgage payment protection while at the same time getting the information needed to ensure that a redundancy insurance policy is suitable. Hopefully in March 2008 deciding which cover you need to buy will be easier when comparison tables are introduced. Tables will show how much the cover will cost, and make the consumer aware of the exclusions and a series of questions will determine which type of cover would be the most suitable.
