Financial breathing room if you are made redundant(Income Protection Redundancy)
In an era of volatile economics, industries are being disrupted at an increasing rate. There are many insurance options available that can provide financial relief for those who have been made redundant(Income Protection Redundancy).
- Income protection policies may include coverage against involuntary redundancy.
- For voluntary redundancy, you can’t get insurance. You won’t get insurance if you take a redundancy package or resign from your job.
- You can only make a claim if the policy has been in effect for at least six months.
- Although payments will be made as long as you are unemployed, they may only last for a certain period of time, such as three months.
- It doesn’t matter how much money you get from your former employer, or the government as a settlement or payment.
Redundancy insurance: Can I be insure for redundancy?
Both yes and no. Yes and no. You cannot insure against your being made redundant in the same way that you can insure against your car being stolen. Some income protection policies include coverage for your involuntary retirement.
This coverage is usually included in an income protection policy. Check the individual coverage to confirm.
For voluntary redundancy, you can’t get insurance. You won’t get insurance if you take a redundancy package or resign from your job.
Some insurance options, such as mortgage protection, can help you repay your loans even if you lose your income. Your financial advisor or lender can discuss these types of insurance with you when you apply. Most policies will include coverage for involuntary redundancy, or offer an option to add it.
Why should I have this type of insurance?
For most people, the days of working for a living are over. It’s worth looking into insurance if you think you might have difficulty paying your mortgage, personal loan, or car payments for the next few months after being laid off.
Who can be insure against redundancy?
You should always check your policy to make sure you are eligible. However, this type of insurance is usually only for employees who work more than 20 hours per week or have a full-time job. Contractors and self-employed workers who work more than 20 hours per week may be eligible for a benefit payment. However, it does not cover the possibility of a contract ending or work drying up.
Is there an expiry date?
You must have the policy in effect for at least six months before you can file a claim.
Although policies vary from one company to another, if you wish to file a claim after you have been made redundant, you will need to wait for the waiting period to be completed. This usually lasts for 30 days. You can file a claim if you don’t find another job within the waiting period.
What would my coverage be?
It pays a portion of your monthly income, depending on which type of policy you have. The payments will be made as long as you are not employed, but they may only last for a certain period.
Your policy payments will cease as soon as you find employment.
Do I have to be aware that there are conditions?
Check the product disclosure statement before you buy any insurance policy. You will not be eligible for benefits if you have reason to believe that you will be made redundant, bankrupt, or insolvent after you apply for the insurance.
- You cannot have been fired or volunteered for redundancy.
- You will also need to show proof of your employment search, such as Centrelink registration or recruitment agencies registration.
- You should also remember that you cannot take out multiple types of insurance against redundancy and then claim them all if your job is lost.
Will I be covered even if I receive a large payout or apply to unemployment benefits?
It doesn’t matter how much money you get from your former employer, or the government as a settlement or payment.
How complicated is it to make a claim?
It is no different from any other insurance claim. It is necessary to show evidence that you were made involuntarily redundant. You also need to meet the other criteria, such as meeting the qualifying period and having no prior knowledge of the redundancy. You are legally required to give a Notice for Termination by your employer when you are made redundant. This means that you should have some supporting documentation. (Income Protection Redundancy)
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