About Redundancy Protection Insurance – Some Details
Redundancy protection is a way of safeguarding your income by planning for a scenario where you may be abruptly out of work through no fault of your own. In times of recession, many organizations take several cost-cutting measures to keep their businesses running. Making employees redundant is one such measure, which is, unfortunately, very common.
In case you are made redundant despite no fault from your end, your employer is legally bound to pay you statutory redundancy pay. But this amount is often quite meager. You will then face the daunting and stressful task of fulfilling your financial obligations month after month without proper employment.
However, if you have shown the foresight to plan for such a scenario well in advance, you can continue with your job search without having to worry every minute about paying your bills. This is where redundancy protection insurance comes in extremely handy. It is a type of income protection scheme that gives you tax-free payouts while you continue to seek employment elsewhere.
By means of redundancy protection insurance, you can choose to pay smaller premiums that will give you short-term payouts, or you can opt in for bigger premiums that offer payment benefits for a longer duration. The payout duration varies from 12 to 24 months for most policies. Based on the details of the policy you have chosen, you can end up receiving the benefit payments within 30 to 90 days of being out of work.
You must purchase this policy well in advance, as you are not eligible for it if your employer has already informed you that your redundancy is up for discussion. Also, you must seek proper advice before making a policy purchase or even switching policies. Insurance company advisers are well-trained to help you make the right choice; so you don’t end up facing the prospect of no payout due to a wrong decision on your part.
You can avail this particular form of insurance to face the potential problem of being incapacitated by redundancy. You are not obliged to divulge details about your monthly outgoings. As long as you have been paying the premiums regularly, the insurance company is legally bound to continue and renew your policy till when you need it. The monthly payouts will help you live up to your financial obligations without worry, while enabling you to work at getting back to active employment.
In these uncertain times where economies are floundering and jobs are crumbling, redundancy is no longer just an idle thought. Preparing yourself for it beforehand is a wise decision if you wish to retain your current lifestyle and hold on to your sense of security and peace of mind. And redundancy protection insurance seems the right way to go about it.
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