Facing redundancy can be a stressful time. And, the last things that you want to be worried about when you’re searching for a new job are your mortgage payments and the welfare of your family.
Taking out unemployment mortgage insurance is essential if you want to make sure you don’t suffer financially if you lose your job.
There are lots of benefits to this cover and a number of factors that you should take into account when you compare unemployment protection insurance.
What does unemployment cover insurance do?
Income protection insurance unemployment cover is designed to provide financial support in the event that you are made redundant.
If you lose your job these policies pay out a monthly sum either until you return to work or for a specified period (typically up to 12 months). They allow you to keep paying your mortgage or other commitments while you search for a new job.
When buying unemployment insurance UK providers will not offer cover if you are already under notice of redundancy. They will also typically refuse cover if redundancy consultations are under way at your employer, if you leave voluntarily or if your unemployment is the result of misconduct.
For this reason it’s important to take out unemployment cover insurance in good time if you want to ensure you are protected should the worst happen.
What to look for when you compare ‘income protection unemployment’ quotes
There are a number of factors that you should take into account when you compare unemployment protection insurance. These include:
The deferred period on the policy
- The maximum percentage and amount of income you can cover
- The cost
One of the most important factors that affects the cost of income protection unemployment cover is the ‘deferred period’ that you choose. This is the amount of time that you elect to wait before your policy will pay out.
You can normally choose a ‘deferred period’ of 4, 13. 26 or 52 weeks. For example, a 13 week ‘deferred period’ would mean that your monthly benefit would not start being paid until you had been out of work for 13 weeks.
If you have savings you can rely on in the event of redundancy then you may want to choose a longer ‘deferred period’ in order to reduce the monthly cost of your unemployment cover insurance.
You should also take into account the maximum percentage and amount of income you can cover. Most income protection unemployment policies let you cover a maximum of around 50-60 per cent of your income and many also have limits on the amount of income you can cover (typically around £18-25,000).
Finally, it is important to compare the cost of cover. Always compare unemployment protection insurance prices before you buy to make sure you get the right cover at the right price.
Check how long they will pay out for if you claim, and whether there are any terms and conditions that could affect your ability to make a claim if and when you need to.