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About Redundancy Cover
Redundancy cover is a plan that will pay you a monthly payment to cover your mortgage payments and other commitments if you are made redundant. This will give you the peace of mind of knowing you can meet your most important commitments and protect your family while you look for new employment.
Will I get some benefits from the state to help me?
The current rate for Job Seekers Allowance, if you qualify based on the National Insurance you have paid, is £73.10 per week (April 2015)
You may also qualify for help with mortgage payments, however this will not start until you have been unemployed for at least 13 weeks and the state will only cover the cost of the interest payments. That means, if you have a repayment mortgage, not all of your mortgage payment will be covered and you risk falling into mortgage arrears.
Will I get redundancy payment from my employer?
You should look at the contract you have from your employer to see what agreement you have in relation to redundancy. If there is no agreement, then you may qualify for statutory redundancy cover. To get statutory redundancy, you do need to have been employed for at least 2 years. If you have been employed for at least 2 years, then your company would have to pay you the following benefit if you are made unemployed:
- half a week’s pay for each full year you were under 22
- 1 week’s pay for each full year you were 22 or older, but under 41
- 1 and half week’s pay for each full year you were 41 or older
However, this would be limited to the first £464 per week of pay.
How does Redundancy Cover work?
You make a monthly payment to the provider, in return for a monthly payment covering the sum you have insured to pay your commitments in the event of redundancy. Some plans will also include cover if you are too ill to work.
How soon and for how long will I be covered for?
If you are made redundant, although there are variances amongst plans, a typical plan will pay after you have been off work for 30 days and will continue to pay the benefit until you have been off for 12 months or when you return to work.
How much will the plan pay out?
You can chose the level of cover you need and the plan will be priced accordingly. There is however a cap on the maximum benefit which is linked to your salary and this is typically around 65-75% of your salary.
Can I have redundancy cover if I am self employed?
Some providers will consider providing cover for self employed applicants. In order to claim however, you will need to demonstrate that your company has ceased trading on a permanent basis and that your business has insufficient assets to meet its debts and liabilities.
Connect can help provide a back up, if ever you need help getting back onto your feet.
Please give us a brief summary of what it is you would like to do and we will come back to you quickly to let you know how we can help. If you want to talk to us immediately, please call 01708 676 111.