Insurance for Job Loss and Redundancy

Insurance for job loss, often referred to as redundancy insurance, is a type of policy available for up to 12 months which covers you for potential loss of income. It can aslo protect your mortgage payments, loan, car and credit card repayments in the event of unemployment. However, redundancy payment will only cover involuntary redundancyand will not cover instances were you are fired and leave of your own free will.

Types of Cover

Most insurance for job loss only covers involuntary redundancy, which are instances where your place of employment has to let you go for reasons not pertaining to your performance. These particularly policies are specific and will not cover accident in the workplace, or injuries. If you are let go because of your performance (i.e., fired) or leave voluntarily then your policy may also be void.

If you already have insurance with another provider - for example, home insurance - you may already have insurance for job loss or redundancy included in your policy. It might be worthwhile to check whether any other products you have offer redundancy insurance as this can generally reduce the cost of your cover.

How it Works

Typically, you can choose how much you want to protect and how much you receive in as a monthly benefit from your insurer. Insurance companies normally protect up to 65% of your income - but the amount you wish to cover (and consequently receive in monthly payments) will also influence how high your redundancy insurance premiums are.

When you sign up, your insurance provider will ask for details about your employment situation (occupation, work hours and contract type) and tailor your insurance subject to your circumstances. Contracts which are temporary may not qualify for insurance or may be more expensive.

Price Comparison Sites

One of the best ways to find the best insurance for job loss and redundancy cover is to use price comparison websites, which allow you to input your information once whilst the site searches for potentially beneficial deals for you. However, you may want to look at government regulations for employment rights in the UK and consider whether you would need to be covered in the event you lost your job (in some cases, it's more cost effective to accept an employer's redundancy pay than pay into a short term insurance policy).

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