Unemployment Cover

Unemployment insurance is often provided with ASU policies which cover Accident, Sickness & Unemployment. Claims are paid as a monthly benefit to replace lost income in the event of accident, sickness or unemployment.

The claim period is usually restricted to 12 or 24 months or when the person returns to work.

Unemployment insurance can also be purchased as a stand-alone product just to protect against the risk of redundancy.

Straightforward unemployment cover can be set up in the same two ways as ASU cover. To protect financial commitments such as a mortgage or rent – or to protect income instead of outgoings.

Mortgage Payment Protection Insurance – MPPI – will be based on the monthly mortgage amount or rent plus certain associated costs. The policy holder must have a mortgage or be renting.

Income Protection – IP – This will protect up to 50% of earnings or £1000 of monthly benefit (whichever is the lesser) and although it can be used to protect a mortgage or rent a policy holder does not have to have either.

This type of cover is not to be confused with PHI (Permanent Health Insurance) which is also referred to as ‘income protection’.

Unemployment cover is not suitable for people who are aware of pending redundancies or people who are already out of work. Certain evidence will required at the point of claim and if this cannot be produced the claim will not be paid.

Unemployment cover is available for self employed people but they must be out of work and eligible to claim Jobseekers Allowance. For company directors, the company must have ceased trading.

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