Unemployment cover can provide a financial lifeline
- 26TH SEPTEMBER 2007
While things might be going smoothly right now the unexpected happens - and it invariably does - and if you should find yourself unemployed for any reason then you would still have to pay your essential outgoings each month which will put a severe strain on you and your financial situation. An alternative, providing your circumstances are right, is taking out unemployment cover and this could be a lifeline if you were to find yourself suddenly unemployed.
Unemployment cover when taken out correctly will give you a monthly tax free income if you should find yourself out of work due to becoming unemployed through involuntary, unexpected redundancy. A policy also can be taken to guard against being out of work due to accident and sickness.
Providing your circumstances fit those in the policy and you have read the exclusions that are listed in all unemployment cover policies, then it could start to pay out after you have been out of work for 30-90 days and some providers offer cover backdated to day one of your claim. Unemployment cover would then continue to pay out for up to 12 months (and with some providers for up to 24 months) which is ample enough time for you to get back to work and on your feet again.
However when it comes to purchasing unemployment cover it can be confusing. Payment protection insurance (another name for redundancy cover) has recently received negative publicity and especially so when it comes to the high street lender. Something which Simon Burgess, Managing Director of standalone specialist provider British Insurance, is forever warning about is how the high street lender rips-off the consumer by often charging high premiums for the cover while offering little information about the key facts and exclusions.
Unemployment cover provides an invaluable lifeline should you be made redundant but it has to be bought correctly and you have to ensure that you are ware of the exclusions. British Insurance can help you to decide if a policy is suitable for your needs by explaining in plain English both the exclusions and the key facts regarding a policy.
