Unemployment insurance pays an income

Wouldn’t it be nice if someone was on hand to provide you with an income if you should lose your own? Well if you had the foresight to take out unemployment insurance then your payment protection provider would supply that income. Of course you would have to ensure first that the policy would be suitable for your needs by checking the small print and you would have to choose which type of cover would be best.

There are three types of insurance you can choose from. Protection can be taken in the form of income, loan and mortgage insurance. However while they all payout to protect different things, they all work basically the same. You would pay a premium which is based on the amount you want to cover each month and your age at the time. If then you should become unemployed through reasons not of your own such as redundancy you would get the sum of money you had insured against, tax-free.

When and for how long the cover would provide you with benefit depends on the provider. Some will payout from day 30 as does standalone specialist British Insurance, while others could make you wait up to the 90th day. British Insurance would provide you with 12 months cover while some could offer a policy for 24 months. British Insurance would also backdate benefit to the first day of you becoming unemployed, but not all providers will do this.

Every homeowner’s biggest worry is their mortgage and with mortgage protection when taken out as unemployment insurance you will be able to carry on meeting the repayments. You would not have to worry about having your home repossessed if you were to get behind in arrears. Lenders are sometimes willing to give you a break if your problem is over the short term, providing you can catch up on the arrears and pay your mortgage. However if it takes several months to find work again then you could be faced with losing your home. Therefore mortgage payment protection would give you peace of mind with the income it would provide.
Loans and credit card repayments can also be covered the same way. If you wish to protect any repayments such as these then you have to consider taking loan payment protection insurance. The sum you pay your premium for will be the amount of your loan repayment each month and this is the sum you would receive. Your credit rating could be kept intact and you would not be risking getting into debt.

You can choose to protect your repayments on the whole with unemployment insurance by way of income protection. This would allow you to insure up to so much of your income each month. If you became unemployed you would then be able to claim on the cover and be able to continue meeting all of your essential outgoings. This would include your mortgage repayment, loan repayments and credit card repayments. Of course you would also be able to keep ahead with all your other essential outgoings too.