What happens if I am made redundant?

Every day in the UK, over 500 people are made redundant in the UK, and 60% of unemployed people are out of work for six months or more. In either case you will still have to make your loan repayments unless you are protected by personal loan or short-term payment protection insurance.

Hot Topics

How Much Will It Cost?: You can have Short Term Income Protection Insurance for either unemployment alone, or sickness and accident alone, or all three. The costs of the policies is much lower than you'd expect.
Will Short Term Income Protection Insurance pay out immediately you make a claim?: You have to be off work for 30 days before you can make a claim but the income is then backdated to the very first day you were off work.
You want to ensure that you receive a monthly income if you became sick, unemployed or had an accident for as long as you were off work (i.e. no limit of 12 months) or until the insurance policy finished whichever came sooner.: You need Permanent Health Insurance.
How much should you insure for?: Most people get enough income protection insurance to cover their fixed monthly bills plus sufficient for day to day living expenses.
For how long will the policy continue to provide income: Short Term Income Protection Insurance will provide income if you are off work and the income will continue for up to 12 months or cease when you return to work, whichever is the sooner.

Check the small print for your individual policy, as there are many different requirements that apply to claiming your insurance for redundancy. For example, you can’t claim for unemployment until you’ve had the policy for 120 days with many insurers. Before you can claim for unemployment, you normally need to have been in full-time work for six months. The requirements may vary if you are on a fixed-term contract or are self-employed. If you work part-time, you usually need to be employed for more than 16 hours a week to be able to eligible for cover. Always make sure that you qualify for cover when you buy the loan insurance policy.

Payments will usually start when you have been out of work for 30 days, and they will continue either until you return to work, or up to 12 months, whichever is sooner. Again, this will vary between insurers so check with them for the exact terms and conditions of your policy.