Redundancy Cover

Article published on 23rd November 2011

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This article focuses upon the potential benefits of Redundancy Cover. Here at Top Quote UK we help many people find and arrange cover which is right for them.

What is Redundancy Cover?

Redundancy or Unemployment Cover falls under a policy which is known as Accident, Sickness and Unemployment Insurance, or ASU for short. This is a short term policy which is designed to help you with monthly bills, mortgage payments or general living costs. The policy pays out a monthly benefit should you find yourself out of work from an Accident, Sickness or Unemployment/Redundancy.

What does it mean by Short Term?

It is considered a short term policy because it will only pay a regular monthly benefit for 12 to 24 months, or until you have returned to work, whichever comes first. After 12 to 24 months you will no longer receive money from the policy. This is dependant upon which Insurer you choose to purchase your policy with.

How much would I get each month?

You are normally able to cover between 50%-75% of your annual salary. The monthly benefit you are entitled to is determined by either the maximum amount of cover allowed by the insurer and/or the total monthly outgoings for your mortgage payments, loans, rent and provable monthly outgoings e.g. phone bill or council tax. It is essential that you provide an accurate account of your monthly expenses as upon the point of a claim the Insurance company may request proof of your regular outgoings.

Similarly if your circumstances change and your mortgage payments decrease or your regular bills are reduced you should inform the Insurer of your new outgoings. Insurers may refuse to pay your full monthly benefit to you upon a claim and “cap” the payment to your new regular outgoings.

Are there any restrictions to having Redundancy Cover?

Yes, Insurance companies do have restrictions on people looking for cover. This can be based on your occupation, age and/or health. Our industry trained financial advisors are more then happy to talk you through them and help you get the cover you need.

Some of the restrictions include:

Do I start getting money from my policy on the same day I am unable to work?

No, you always have a waiting period before you will receive any money from your policy. How long you have to wait depends on the policy when you take out, but you often have a choice as to the length of this waiting period when you start your Redundancy Cover.

This can range from a “Back to Day One Cover”, where you do not receive your first payment until 30 days after you make a claim. This payment will then be back dated to the initial date of the claim. It is important to know that the waiting period you choose can have a effect on your premiums.

Looking for a Long Term Policy?

If you are looking for an insurance policy to cover you in the case you find yourself unable to work for the rest of your life then an Income Protection policy might be better for you. As always our qualified advisors are more then willing to help you in finding which policy is better for your needs.

Click Here to find out more information on Income Protection Insurance.

I still have some more questions?

If you have not found the answer you have been looking for in this short article then feel free to give one of our qualified advisors a call on 0808 17 82 777.

Where do I go from here?

From here you can read our Accident, Sickness and Unemployment page where you can get a Instant Online Quote for Redundancy Cover or you can give us a call at Top Quote UK on 0808 17 82 777.

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