Unemployment insurance is a catch-all term for mortgage payment protection, loan protection, and income protection, all of which are taken out in case you suddenly lose your job. Even though there have been many problems with the insurance, it can be a lifeline if you lose your job because it gives you a tax-free income every month.
Coverage can be bought just to protect against being unemployed, or, for an extra fee, it can also protect against being hurt or sick and unable to work. Unemployment insurance can be very helpful if you suddenly lose your job, but not everyone needs it because some people are not covered. Common ones are if you have a long-term illness, are retired, only work part-time, or are self-employed. Always read the policy's terms and conditions, because exclusions depend on the insurance company.
Once you know that a policy would work for you, you have to decide what kind of coverage would be best for you. Mortgage insurance will give you a tax-free income so you can keep paying your mortgage each month and keep a roof over your head. You will need loan payment protection if you have loan payments or credit card payments to make every month. You can get income protection to make sure that you will still be able to pay for the things you need and won't have to change your lifestyle too much.
Between the 31st and 90th day of being unemployed, you could start getting money from unemployment insurance. Once the insurance started paying out, it would keep doing so for another 12 to 24 months, which is usually more than enough time to find work and get back on your feet. The cost of the insurance depends on how much money you make, how much of your loan, mortgage, or credit card payment you want to cover, and how old you are when you get the insurance.
Even though premiums vary, a standalone specialist provider will always give the cheapest quotes for unemployment insurance. They will also always give the most important facts so that the person can make an informed decision about whether or not a policy is right for them.
Since the Financial Services Authority started looking into it in 2005 after a big complaint from Citizens Advice, people have lost faith in payment protection policies. However it should be remembered that it is not the fault of the actual products but those who sell the cover with little or no sales experience. Most of the people who have been fined are high street lenders who sell unemployment insurance along with loans, mortgages, and credit cards. The safest and cheapest way to buy any kind of payment protection policy is from someone who specialises in selling it. A specialist will be able to answer any questions you have about payment protection.
