Unemployment cover

When you buy an unemployment cover plan – which is part of the payment protection insurance (PPI) family - you decide right from the beginning the amount of replacement income you will need in the event of your becoming involuntarily unemployed.

This, of course, will subject to the provider’s own limits and the monthly premiums you will pay are determined by the amount of protection you select. As just mentioned, the amount will be subject to the payment insurance provider’s limits, but the income will go a long way to meet your financial requirements in the event that you lose your income due to losing your job.

Another advantage of these unemployment cover policies is that you can tailor the insurance further to meet your needs by adding on further benefits for a further premium. You can add accident and sickness insurance which means that you will also receive a tax free sum every month if you are unable to work due to recovering from an accident or long term illness.

British Insurance are a standalone provider of unemployment plans and are among the cheapest in the market place. They can tailor your policy to meet your requirements, so that you have exactly the right payment protection insurance in place.

What benefits you choose depends on what existing arrangements you have in place already (if any), or any schemes at work. For example, you may have an employer’s sick pay scheme that will give you full pay if you are off due to incapacity or illness, for up to six months’. In this case, for example, you may decide that you will need just unemployment protection.

With the latter, of course it’s important to remember that to be eligible for the unemployment cover benefits you have to become unemployed through no fault of your own. Redundancy insurance will not pay out if, for example, you’ve simply resigned from your present employment, nor will it pay out if you have been dismissed because of your own misconduct at work. To pay out for redundancy, it has to be involuntary redundancy.