Have you been wondering how you might manage if you or your partner were made redundant and found it difficult to get another job? It’s one of those things that we all worry about in the middle of the night.
But it’s an important thing to consider, especially if you’re paying a mortgage or loan, your rent is high or you have children to support.
How does unemployment insurance work?
It’s the reason why some people choose to buy unemployment insurance. Here’s how it works. If you have bought an unemployment insurance policy and you lose your job, you will be paid a tax-free monthly income, which starts after a pre-agreed waiting period. This is sometimes called the deferred period. The longer this period is, the lower your premium, so it’s worth looking at a couple of options and calculating how long you could wait before receiving the funds.
If you’re thinking about buying a policy and the level of cover you would need, consider whether you only need to cover your mortgage, loan or debt repayments or whether you might need to cover your salary as well. You can insure up to 50% of your income on a monthly basis. But of course, the more money you need, the higher your premium.
If you work for an employer, look into what you would be due if you were made redundant. If you haven’t been with the company very long you might not receive much, and would need to find another job almost immediately in order to keep on top of your outgoings. It’s important to note, too, that you’re not covered if you take voluntary redundancy or if you have to leave the company because of misconduct.
Comparing insurance quotes
The good news is that it’s easy to compare the different levels of cover and the prices with comparethemarket.com. Just fill in our online form with your details and the kind of cover you are interested in. It only takes about a minute or two. We will ask whether you specifically want to cover yourself for loan repayments, or if you want mortgage protection insurance. You can also get cover for up to 50% of your monthly rent or your overall income.
You then put in the details of the loan or income, and choose whether you just want unemployment insurance, or if you would also like to compare quotes for accident or sickness cover.
You’ll then see a page listing all your quotes in price order, with the cheapest at the top. There are also different tabs you can select to view the different kinds of cover and how much they would cost.
Check the details
Make sure you look at all the details of each policy, not just the price, as they will be slightly different in what they do and don’t cover, how long the waiting period is and possible their other features. You can also call to speak to an expert if you have any queries.
Once you have chosen the right cover for you, click to go to the insurer’s website and buy the policy. Again make sure you read all the details.
Do you need life insurance?
Many people that buy unemployment insurance also buy life insurance. This is designed to provide a large sum of money to your partner and/or children if you were to die. A lot of people buy life cover to provide enough money to pay off the mortgage, so that their family won’t have the worry of paying for their home when they aren’t around anymore.
The funds could also be used for funeral costs, debts or support in some other way.
There are a few trigger points in life that might make a person think about buying a life policy. Buying a home is one of these, as it could mean that your partner or family could inherit a mortgage free home. Another is getting married or settling down with a partner. A third is starting a family. When there are important people in your life, you might start thinking about what they would need if you weren’t around to provide for them.
So it can be a pretty important cover to have in place and could mean a great deal to the people left behind if you were to die.
Comparing life cover
With comparethemarket.com it’s easy to compare life insurance. It only takes on average three minutes (we’ve timed it!) to get to a list of life insurance quotes tailored to you.
First you need to decide whether you want to look at single cover or joint life insurance. With joint cover you may pay a little more, but you will get a payout upon the death of either of the insured people on the policy. However, this policy would end after payout, so the other person may need a new policy after this.
Next you need to set a time limit on the cover – enter the number of years you want it to last. This might match up with the amount of time left on your mortgage, or when you think your children may be independent and no longer need your financial support.
Then you just need to tell us whether you have smoked or used anything containing nicotine in the last 12 months. Because of the health risks linked with smoking, insurers usually charge more to cover a smoker.
Next you’ll see a list of life insurance quotes from the providers that can cover you, listed in price order with the cheapest life insurance at the top. Remember, cheap life insurance isn’t necessarily the best life insurance for you, so do read the details carefully before you buy.