With more and more people being laid off work due to the economic crisis, the number of homes being repossessed and tenants being evicted for nonpayment of rent is on the rise. Here is where redundancy insurance can help you. This is a form of insurance which gives you a monthly payment in case you have been made redundant involuntarily.
Most policies offer payout for upto 12 months from the time of unemployment while some expensive redundancy insurance policies offer pay out for upto 24 months. To be eligible for redundancy payout, you must have paid each of the premiums thus far and should continue doing so in time of claim period. You must be able to prove that you were employed for a minimum of 6 months before submitting the claim. You will need to provide evidence that you are currently actively seeking employment. You are also eligible to receive payout from your redundancy insurance policy if you are unable to work for sometime due to ill health.
There are three main types of redundancy insurance policies. Mortgage protection insurance is a kind of redundancy policy that ensures that your mortgage debts are paid off regularly even though you are unemployed. You can choose to take it as a standalone policy or you can choose a redundancy cover which covers your mortgage and also gives you an income to meet other expenses. For such policies, the premium will be higher than that of standalone mortgage protection plans.
Salary protection insurance is another kind of redundancy insurance. Under this policy, you get upto 50% of your gross salary as payout to meet your daily expenses. Some insurance companies offer salary protection policies with additional benefits like a lump payment in case you become a care giver and need to quit your job, additional life insurance cover and back to work support for people who are independently employed. In addition, there is redundancy insurance called rental payment insurance. It ensures that you receive rental payments during the unemployment period. Redundancy insurance is highly beneficial since it ensures that you do not fall back on rents, mortgages and credit card dues during the period of your unemployment.
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