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Redundancy Cover Can Give Security In Case You Should Find Yourself Out Of Work

Nov 13, 2007
Redundancy cover is also known as payment protection, loan protection and income protection insurance and is taken out to safeguard against the fact that you could find yourself unemployed after being made redundant. If you were to come out of work then you would still have to find the money each month to carry on paying your essential outgoings such as your mortgage, loan or credit card repayments.

If you want to insure against coming out of work and having the money with which to pay your general outgoings and continue living your lifestyle then you could take out redundancy cover to protect your lifestyle by way of income protection. Income protection would give you a replacement income up to a certain amount of your own, which would allow you to continue meeting your essential outgoings.

If you have loan repayments to make each month or credit card bills to pay then loan payment protection could be what you need. Loan payment protection will give you the money each month with which to carry on paying your monthly loan repayments based on how much your repayment is each month.

Mortgage payment protection can be taken out if you have a mortgage to repay, the cover would ensure that you wouldn't be at risk of losing the roof over your head if you were to be made redundant. As your mortgage is probably your biggest outlay each month and you have to ensure that you keep up with the repayments, losing your income could mean that you risk losing the roof over your head. Mortgage payment protection could mean that you wouldn't have to worry about where to find the money which is a great safety net to fall back on.

However all the family of protection policies have many things in common, for instance all policies have exclusions within them that could mean a policy isn't in your best interest. It is imperative that you make sure you have read the exclusions and understand whether or not a policy is in your best interest, while exclusions can differ slightly from providers there are some that are common. If you are in part time employment, self-employed, retired or suffering from a pre-existing medical condition then a policy wouldn't be in your best interest, always check out the small print before buying your cover.

All policies will begin paying out once you have been out of work for a period of time, this period of time can differ between providers and can be anywhere between the 31st day and 90th day of being out of work, once the cover has commenced it would then continue to provide a tax free income for between 12 and 24 months again depending on the provider. Redundancy cover can be taken out alongside loans and mortgages but this is generally the dearest way to purchase the cover. The premiums charged by high street lenders can add hundreds and even thousands of pounds' more onto the cost of the cover than it has too. Historically, standalone specialists in payment protection products always offer the cheapest premiums for redundancy cover along with giving the consumer the advice and information needed for them to make an informed decision regarding the suitability of the cover for their particular circumstances.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of redundancy cover, loan protection insurance and income protection insurance.
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