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.
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.
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