What does an Unemployment Protection Insurance Policy cover?

Unemployment protection insurance was designed to overcome the consequences of unemployment. You pay premiums as a proportion of each £100 of cover that you need, and then should you become unemployed for reasons beyond your control, you will receive a monthly amount which should help you pay off your bills and also maintain a reasonable standard of living until you find work again.

We would need to take out and unemployment protection insurance policy has already been covered elsewhere on this site. But the actual product should be looked at in more detail.

Firstly, unemployment is usually a flexible product, in that it can cover anything that you need it to cover. You don't need to have mortgage to get covered under this insurance, although it can cover the mortgage payment, or rent, household bills, loans or any other possible purpose you could have for it.

You can select the cover you want, usually up to some limit like £2000 a month. The amount you get per month is usually related to your salary when you take the cover out and limited by whatever the maximum is. The benefit is payable for an agreed period, which is usually either 12 or 24 months.

The benefit is usually available after an initial exclusion period, which is agreed when you take out cover. This is a period of time immediately after your insurance start date during which should you be notified of impending unemployment you will not be covered. Should this all be adhered to, there is then a further excess period, during which you need to be continuously unemployed or disabled for what is called the excess period (usually 30 days) before you receive your first payment.

The premiums that you pay do not have tax relief on them, but the payouts are not taxable. This type of cover is not just available for people who are employed by a company, they are also available for those who are self-employed, or are directors or proprietors of a business assuming their business ceases to trade.

Premiums are not affected by you age or gender, but they are affected by the amount of cover you want, the initial exclusion period and how long you want the benefit to last for.

You should also bear in mind that unemployment protection is only available for those of working age (18 - 64) and will need to have been actively working in continuous employment (not seasonal or temporary) for more than a certain amount (usually around 20) hours a week. You should also not know of impending unemployment, and this can be investigated so make sure you don't try anything, or you will lose cover.

 

 

 

 

© AskFinancially.com 2008

Unemployment

Ask About

> Unemployment Insurance Overview..
> Who should take out unemployment cover?
> What does an unemployment protection insurance policy cover?
> What does a mortgage protection insurance policy cover?
> What does an income protection insurance policy cover?
> What does a payment protection insurance policy cover?
> What is the difference between redundancy protection insurance cover and unemployment protection insurance cover?
> What is the difference between a mortgage protection plan and a mortgage protection policy?
> What is the difference between an income protection plan and a income protection policy?
> Is it possible to insure protection for my mortgage repayments?