Redundancy cover can be taken out to protect against the fact that you might find yourself out of work due to being made redundant. While the cover just guards against involuntary redundancy, you can also take out additional cover to insure your income against coming out of work due to accident, sickness and unemployment together.
Redundancy cover can be taken out in the form of mortgage payment protection, income protection or loan payment protection insurance and it can give great peace of mind and security by providing you with a tax free monthly income that ensures you could continue to pay your essential outgoings.
Mortgage payment protection insurance (MPPI) will give you a monthly tax free income so that you can carry on paying your mortgage repayments each month you continued to be out of work, this means that you won’t get behind on your mortgage repayments and risk repossession.
If you have loan repayments to make each month then loan payment protection will give you the money with which to carry on meting your loan repayments. Finally, income protection insurance would give you a replacement income up to pre-agreed amount each month which will let you pay your essential outgoings and continue living your current lifestyle.
All redundancy policies will begin to payout after you have been out of work for a certain amount of time which can be anything from the 31st day to the 90th day of being out of work continually. Once the policy had kicked in it would then continue to give you an income for up to 12 months and with some providers for up to 24 months.
However there are exclusions in all redundancy cover policies which could mean you would be ineligible to make a claim and the most common include only being in part time work, if you are retired or if you suffer from a pre-existing medical condition at the time of taking out the cover.
Stick with a standalone provider for your redundancy policy as not only can the specialist save you money on your policy but also make sure that you get the correct advice and the key facts that you need to ensure that a policy is suitable for your circumstances.
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