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Redundancy insurance

We’re sorry, but you can’t get quotes for unemployment insurance. Lots of insurers aren’t providing redundancy cover anymore because of Coronavirus. You can still compare accident and sickness cover though[1]

What is redundancy insurance?

It’s a short-term income protection policy. You'll hear it called unemployment protection insurance too.

It provides cover for your income, for up to 12 months, if you're unable to work due to involuntary redundancy. It can be used to protect things like your income, mortgage payments or loan and credit card repayments.

Do I need it?

If you’re concerned about being made involuntarily redundant, unemployment protection can give you the peace of mind that you’ll still be able to pay your bills if you lose your job.

It can cover your outgoings while you look for something new, which could really take the pressure off while you’re job-hunting.

How does it work?

After you’ve made a claim and it’s approved, you’ll start receiving payouts. Payouts are usually no more than 70% of your annual income before tax. With some policies there'll be a capped limit instead.

It can be paid either straight away or after a set amount of time (deferred payments). Though most only pay out after a deferment period. 

You’ll keep receiving the payments until you get back into work, or for however long the term lasts, which is usually a maximum of 12 months.

There are circumstances which would mean that you’re ineligible for unemployment protection. These include working in your current role for less than six months, being over a certain age or working part-time.

96,000 people were made redundant in the UK between January and March 2018

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According to Statista in 2019[†]

What does redundancy insurance cover?

You'll usually only be able to get redundancy insurance if you're in full-time employment. If you're self-employed, there are options available from specialist insurers, but you may be required to prove your income.

You can choose between an unemployment policy or an accident, sickness and unemployment policy.

  • Unemployment only

    • You'll only be covered if you're made redundant involuntarily
    • Won't cover you if you're dismissed, choose to leave your job or are ill or injured
  • Accident, sickness and unemployment (ASU)

    • Offers redundancy cover as well as cover for if you’re unable to work due to an illness or injury
    • It's the most comprehensive type of unemployment protection available

How to get redundancy insurance

When you get a quote with us, we’ll make it easy to get the right amount of cover:

  1. Choose what to protect

    You can choose to protect your income, mortgage, loan or credit repayments, or simply pick ‘other’ to choose an amount

  2. How long for?

    For an involuntary redundancy policy, this will usually be restricted to a maximum of 12 months. Other types of income protection may offer longer benefit periods

  3. Tell us about yourself

    The usual details like your name, date of birth and information about your job

You never know when redundancy insurance could come in handy

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How to cut the cost of redundancy insurance

  1. Get the right amount of cover

    If you can get by on less, for example if you have savings you can use, there’s no need to pay premiums for 70%

  2. Increase the deferred period

    You could knock your payments down by delaying your unemployment protection payout if you could live on savings for a few months

  3. Lose the waiver of premium

    If you’re willing to keep paying for your policy while you’re receiving a payout, you could save

  4. Review your policy regularly

    As your circumstances change, you might find you're able to decrease your cover

  5. Shop around

    Always compare unemployment insurance policies to make sure you’re getting a great deal

Frequently asked questions

  • Can I get redundancy insurance for other things as well as unemployment?

    Yes, as well as getting cover for redundancy, you can get policies that also cover accidents and sickness that stop you from working.

  • How much is redundancy insurance?

    This depends on various things like your age, smoker status, income needs and length of cover. For a personalised idea, get a quote from us. Your employment status will also factor into the calculations of your quote.

  • What isn’t covered by redundancy insurance?

    If you become unemployed by taking voluntary redundancy or resigning, take a career break, become unemployed due to your own misconduct or because of industrial action, you won’t be covered.

  • Do I need life insurance too?

    Unemployment protection isn’t the same as life insurance. Life insurance will pay out when you die so that your loved ones won’t have to worry about paying funeral costs or any outstanding debt. But you’ll have to be very much alive to benefit from unemployment protection.

  • Why can’t I just rely on state benefits?

    State benefits can come in handy, but they may not be enough to cover your salary or pay your mortgage and bills.

  • Do I get a payout at the end of the policy if I don’t claim?

    No, you’ll only get a payout if you make a legitimate claim on your policy.

  • Is it possible to take out joint cover?

    No, each policy is tailored to the individual.

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Other types of income protection

[1]Gocompare.com introduces customers to ActiveQuote who are authorised and regulated by the Financial Conduct Authority. Gocompare.com's relationship with ActiveQuote is limited to that of a business partnership, no common ownership or control rights exist between us. Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites

[†]Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites

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