There is no excuse for either of the above, the competition commission has told you that you should not buy at the point of sale and the internet allows us to compare products with ease.

Redundancy Insurance is a contract and as such there will be terms and conditions attached.

Here are a few of the more important one to watch out for:

Eligibility: Do your employment circumstances fit the eligibility criteria?

Care should be taken here, generally you need to have been in employment for six months continuously, working more than 16 hours per week, actually working i.e. not drawing sick pay, aged between 18 and 65, be resident and working in the UK, Channel Island or the Isle of Man. Seasonal, temporary or contract workers are generally excluded.

Failure of any probationary periods is not covered.

Initial Exclusion period: Important to watch out for this one – most Redundancy Insurance have this as a built in condition to avoid being selected against i.e. policies being taken our when there could have been some knowledge of impeding redundancy. Normally, these exclusion periods are around 90 days.

Deferred Period: Following acceptance of a valid claim, benefits are payable monthly after a 1, 2 or 3 months period. A policy that pays out after three months has elapsed is less expensive and can be useful if a rainy day fund is available or some degree of redundancy money has been paid out. There is “back to day one” cover is available with some Redundancy Insurance; this will pay benefits back to day one, at the end of a 30 day deferred period.

Generally the maximum period that a Redundancy Insurance will pay a claim for is 12 months. If you have received payment in lie of notice, payment will not be made for this period.  During the claim, you must be available and actively seeking work.

The message is clear, when searching for a Redundancy Insurance, be clear about what you are looking for, and read the terms and conditions carefully.

©2010 Income Payment Protection Insurance. All Rights Reserved.

However, before you go running out to purchase a Redundancy Insurance, there are a few things that you should know:

• Redundancy insurance pays out in cases of compulsory redundancy only, if you choose voluntary redundancy, the policy will not pay out.
• Most policies exclude seasonal workers.
• A typical Redundancy Insurance will state that employees must have been employed continuously for six months prior to claim and be a permanent member of staff.
• Redundancy Insurance has an initial exclusion period, the avoid the insurance company being selected against by those that had some knowledge of an impending redundancy, typically 120 days
• In the event of a valid claim, payment start dates vary between 30 to 60 days, however there are Redundancy Insurances that offer “back to day one cover”, which may suit some people. These policies may be a few pence more expensive per month, but could be worth the extra cost for some.
• If you claim on the policy, you must demonstrate that you are actively seeking work. The insurers would expect you to enter into a Job seekers agreement at the job centre, which involves a fortnightly sign on and some state benefits. These benefits are not reduced in any way by the Redundancy Insurance claim payments.

If you already own a Redundancy Insurance that you purchased through a lender, think that you are paying too much per month and would like to switch, make sure that the scheme that insurer that you choose will waive the initial exclusion period, thus offering continuous protection.

©2010 Income Payment Protection Insurance. All Rights Reserved.

A pre-agreed amount can be covered, usually up to 50% of your gross earnings, with benefits on claim being paid directly into your bank account; tax free under current HMRC rules.

Cover can be arranged for loans, mortgages, or simply your income. In the event of a valid claim, benefits are normally payable for a 12 month period, during which time; you must simply be registered for Jobseekers Allowance (contribution or income based).

Redundancy Insurers will all include a set deferred or initial exclusion period which you must wait before claiming on the protection; however if you have cover with another insurer and want to switch, some Redundancy Insurers will waive the initial deferment period before a claim is allowed. This “switching” feature is particularly important to those who have been sold expensive and difficult to claim on Redundancy Insurance Policies sold by the Banks.

If you have purchased a Redundancy Insurance through a lender, review the cost/benefit to make sure that you are not paying too much, for a policy that you cannot claim on.

As with all Redundancy Insurance Policies, read the Key Facts and policy conditions carefully to make sure that the Redundancy Insurance cover is suitable for your employment situation.

And finally; use the internet to save money.

©2010 Income Payment Protection Insurance. All Rights Reserved.

An excerpt from this redundancy insurance article:

“The message is, if this is a product you need, buy it quickly”

Whilst insurance companies have removed themselves from the market or limited their exposure to certain aspects of cover, there is no short supply of redundancy insurance policies. What we are seeing is the ‘redundancy insurance’ only option being removed from many policies so that you have to buy the accident and sickness aspects of cover as well. Whilst you still have the redundancy insurance cover the insurance company gains a bit more premium from you just in case you claim.

The valid part of the argument is that there will be a steep rise in redundancy insurance claims very soon, with unemployment rising month on month. The worry about being made redundant and the uncertainty of some companies finances had led thousands of people to seek out and buy redundancy insurance for that extra peace of mind.

©2010 Income Payment Protection Insurance. All Rights Reserved.

Well folks the party is well and truly over, and lean times are here well into the next decade. If ever there was a sign that we are in the doo doo, it’s a chancellor cutting VAT by 2.5% before Christmas in order to stimulate consumer spending……at the busiest time of the year! That’s how bad it is out there; and the chances are, that people won’t return to the spending patterns of yesteryear; will you?

This of course means that jobs will go, that is certain. BT has recently announced 10,000 job cuts, and they are one of the stronger companies.

A news item on the BBC came up with a worrying statistic that one in twelve of us will lose our job. Well, unlike most statistics, this is very believable.  If like many of us, you don’t got a huge pot of rainy day money stashed, but were sensible enough to think about taking out Redundancy Insurance, but thought that you would wait until the last moment to buy…well that moment has come.

A redundancy insurance policy is designed pay a monthly benefit, usually up to 65% of your pre redundancy earnings; should you be made unemployed through no fault of your own. The policy will not put you in a better income position than you were in prior to losing your job, or there would be no incentive to return to work. If you want to cover your self fully, accident and sickness benefits can usually be added to the policy for a little more on the monthly premium.

In the event of a claim under these policies the monthly benefit will be paid directly to you, so you can deal with priory commitments, as you feel fit.

Generally, Redundancy Insurance Policies normally payable for up to 12 months if needed, the benefit is tax free under current HMRC rules.

A Redundancy Insurance Policy does exactly what it says in the literature, so read the Key facts document and policy conditions carefully.

If you have elected to include the Accident and Sickness in the policy, make sure that you disclose all pre existing medical conditions.

These days, as long as you avoid buying Redundancy Insurance through a Bank, you’ll be surprised at the daily cost; it can be as low as pennies per day.

©2010 Income Payment Protection Insurance. All Rights Reserved.