Redundancy insurance

Cover in case of involuntary redundancy - compare unemployment protection policies with ActiveQuote[1]

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What is redundancy insurance?

It’s a short-term income protection policy and is also called unemployment protection insurance.

It provides cover for up to 12 months if you're unable to work due to involuntary redundancy and 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, usually no more than 70% of your annual income before tax, or there may be a capped limit on certain policies.

It can be paid either straight away or after a set amount of time.

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 and 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[†]

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

What does redundancy insurance cover?

A standard redundancy insurance policy will likely only provide cover for those in full-time employment. There are options available from specialist insurers for the self-employed, but you may be required to prove your income.

You can choose between an unemployment policy and an accident, sickness and unemployment policy (ASU).

An ASU policy will provide redundancy insurance cover, as well as if you’re unable to work due to and injury or if you become sick.

Some insurers also offer the option of protecting the value of any employment benefits such as a company car or private health insurance – these benefits are sometimes known as ‘benefits in kind’, or P11D benefits.

Consider how much of that you want to insure as the amount of cover you choose will be reflected in your monthly premiums.

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

You never know when redundancy insurance could come in handy

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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.

  • What’s the difference between an income protection policy and an accident, sickness and unemployment (ASU) policy?

    Income protection won’t typically cover redundancy while ASU does, so is sometimes referred to as unemployment protection. Plus, ASU will generally be a shorter policy of up to 24 months while income protection can pay out until you retire.

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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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