Unemployment Insurance

Unemployment Protection insurance will guarantee you financial security when your salary is involuntarily taken away from you. According to money.co.uk, over a quarter of UK households (34%) have either less than £1,000 in savings or no savings at all. Homeownership has also plunged; in 1997, fewer than 1 in 10 35–44-year-olds in England were renting from a private landlord; this number has since risen drastically to a third of that group.

Overall, the average cost of living is increasing (particularly given the current cost-of-living crisis), but our income is not. With Job Seeker’s Allowance paying out just £84.80 a week, could you survive without a regular income?

If not, you can act to take control of your financial future by insuring your income against the possibility that somewhere, somehow, out of the blue, you could find yourself unemployed. Comparing and choosing the most suitable, comprehensive, and competitive unemployment protection insurance policy is what every household should do, whether you’re single and living alone or have a family. Your income is priceless.

Knowing this, our Unemployment Protection insurance policies provide you with a tax-free monthly benefit, paid directly into your bank account. This allows you to maintain any mortgage or rent payments, as well as your normal household bills, without running up debt or breaking the bank while you search for a new job. By taking out an Unemployment Protection policy with us, you take control of your financial security, instead of leaving it to chance – which recent years have shown us is unreliable at best.

Unemployment Protection insurance works by paying you a monthly tax-free sum, known as your ‘benefit amount’, if you were to find yourself unemployed through no fault of your own. Once you have purchased your Unemployment Protection policy, you will need to complete something called an ‘initial exclusion period’, which is a period after purchase wherein a claim cannot be made. The length of your initial exclusion period is determined by the policy you purchase.

You will need to keep paying the monthly cost or premiums of the policy, and if at any time you are made unemployed or redundant, you will be eligible to make a claim on the policy. There are criteria you will be required to meet in order to show the claims team that you have a valid claim, but you don’t need to worry; it’s all pretty logical.

You will need to provide evidence of:

• Your identity (such as passport or other forms of ID, or a proof of residency for example)
• Your income (payslips or P60s)
• Any financial commitments you may have (mortgage or rent payments, for instance)
• Your redundancy or unemployment, the dates of these circumstances, and reasons for your unemployment (confirmed via your previous employer)

You will also be required to register with your local Job Centre and obtain a Job Seeker’s Agreement, as well as inform the claims team what precisely it is you’re doing to find a job (such as job interviews, for example).

Unemployment Protection insurance covers you for any unfortunate and unforeseen unemployment, redundancy, or job loss. It covers situations beyond your control, such as if the company you are employed by suddenly loses a contract or is having a downturn, or even if it’s affected by global economic issues. Perhaps you’ve been made unemployed due to a merger, or the company is closing due to bankruptcy or liquidation. Ultimately, any of the above reasons could put your job at risk.

Within the policy, you can cover your income or cover your mortgage payments/rent. Any financial agreements such as loans, credit card bills, or debt management plans can also be covered. Perhaps you need your regular household bills, such as food, utilities, council tax, insurance policies, mobile phone or gadget contracts covered – all of these are possible through our Unemployment Protection insurance cover.

Any direct debit commitment you’ve made can be covered by your Unemployment Protection insurance policy, because your income covers all of these bills, and this income is insured. A good Unemployment Protection insurance policy provides the cover you need to maintain all of your financial outgoings if you’re made unemployed.

Are you working? If the answer to this question is yes, then you should at least explore the benefits of covering yourself against unemployment. For what reason could you not need a monthly tax-free payment made to you for a maximum of 12 months if you lost your job?

We’ve heard many reasons as to why customers have been unsure of if they actually need an Unemployment Protection insurance policy. Whether you have savings, a partner who works, credit cards, no mortgage/bills to worry about, or you simply feel that you will never lose your job because your employer needs you too much, you can never be too careful.

These reasons might all be true at that particular time, but the world moves fast; businesses and markets change. Unfortunately, nothing stands still – and that includes our jobs. Being confident is brilliant, but it’s important that you’re also prudent. It’s easy to feel secure when things are going well; when you feel needed at your job, as though you’re irreplaceable. The unfortunate reality of the situation, however, is that nobody is ever truly prepared for an unexpected redundancy, and it can affect you in ways that are impossible to plan for.

Having an Unemployment Protection insurance policy in place secures your salary, preparing you financially for whatever it is that lies ahead.

There are many different Unemployment Protection policies available across the market. Deciding which one is the most suitable for you is vital. The main difference between policies can be found in the length of the initial exclusion periods, the number of waiting days, and the amount of cover you are able to take based on your income.

Some policies require you to have a mortgage, pay rent, or have a plethora of commitments; others only require that you are working. Some are expensive, some are cheap, and some sit somewhere in the middle. Some have extra added benefits, like added legal protection, which could – for example – help you fund an employment tribunal. Others will have back-to-work support that could help you with CV writing or interview techniques. Some will allow you to waive the monthly premium payments should you claim; others will help should you be placed on reduced working hours.

All these added extras can help you make a decision regarding which policy is suited for your own personal circumstances. Every job is different. Every employer is different. Finding an Unemployment Protection policy that works for your individual needs, therefore, is paramount.

When purchasing Unemployment Protection insurance, there are certain criteria that you’ll have to meet in order to be eligible to buy, and more importantly, eligible to claim.

• Are you aged over 18 and under 64?
• Are you permanently employed in either a contract with no end date or a fixed end date, working more than 16 hours a week?
• Are you self-employed or a company director working more than 16 hours a week?
• Are you a permanent, lawful resident of the UK, Channel Islands, or Isle of Man?

If your answer to these questions is yes, you will more than likely be eligible to purchase an Unemployment Protection insurance policy.

• Are you aware of any impending unemployment?
• Are you aware of any restructures, re-organisations, or contractual threats within the department you work in?
• Are you subject to any disciplinary action by your employer?
• If you are self-employed, are you aware of any reasons as to why your company might close permanently?
• Do you have any criminal convictions for fraud, theft, or financial crime?

If you answered yes to any of the above, it may be difficult for you to purchase a policy. However, it is always best to check your eligibility with a trained specialist protection consultant if you are unsure, and our team will be more than happy to answer your questions and guide you through the eligibility process. They will be able to explain your options when it comes to purchasing an Unemployment Protection policy quickly.

You can claim on your Unemployment Protection policy after you have completed your initial exclusion period and you have been made redundant or unemployed. You will only be eligible if that unemployment or redundancy is involuntary.

Unfortunately, you cannot make a claim if you leave your job of your own free will – though that would be nice, wouldn’t it? The reality is that no insurer will cover you against this; you can only claim if your unemployment is involuntary. That means that any acts of misconduct resulting in disciplinary action, or any acceptance of a voluntary redundancy package offered by your employer, will disqualify you from claiming on your Unemployment Protection insurance policy. You must also ensure that you are out of work for at least 30 days, or you will be ineligible for any benefit payments.

Being paid in lieu of notice can also affect when and if you would be paid on your policy. Don’t delay; as soon as you’ve been made aware of any situation that could lead to you becoming unemployed, you should contact us or your claims team. It is important that we are kept well-informed regarding your employment situation; even if that’s just a change of employer or an increase/decrease in your salary, or a change in your working hours, or a move to contract work. All of the above might affect your ability to claim on your Unemployment Protection insurance policy.

If you’ve ever been made redundant or suffered financially because you didn’t have any protection in place before losing your job, then your idea of cost and expense will be very different from someone who has never been in that position before.

Understanding the value of having cover in place is what really counts. If, for example, you were offered £1,000 a month for 12 months, tax-free, for the same amount that you might pay for a cup of coffee each day, would that seem unreasonable or expensive? That’s a monthly investment of just £25; £300 a year for a return of £12,000 if you found yourself out of work. Considering costs in the context of the financial position you might find yourself in without Unemployment Protection insurance is the best way of looking at it.

To find out how much it might cost to cover your own personal requirements, you can compare a selection of instant quotes from market-leading insurers by checking out our quote engine above.