Frequently asked questions on unemployment cover
Here are some questions that you may have encountered if you were looking for information on unemployment cover.
What circumstances are covered by unemployment cover insurance?
It is always difficult to generalise and you should read your policy carefully in order to obtain a precise answer to this question.
The term unemployment insurance may sometimes be used to describe various policies providing three very different forms of protection:
• unemployment arising as a result of you being too ill to work for a period of time or being made involuntarily unemployed (Accident, Sickness and Unemployment insurance is a typical example);
• critical illness cover – strictly speaking, this is not unemployment insurance as such but a policy designed to offer you financial help in the event that you were diagnosed with a critical illness which may, as a by-product, also result in you becoming unemployed;
• redundancy insurance – this policy covers this risk but would typically not pay out in the event that you were unable to work and obtain income due to sickness or an accident.
ASU and redundancy cover are typically associated with short-term payout durations of perhaps a year or so. Critical illness cover may pay out a lump sum over longer periods.
What then, is mortgage cover insurance?
This may mean different things but essentially involves linking an insurance policy to your mortgage so that under qualifying conditions (e.g. sickness, redundancy etc) your mortgage would continue to be paid if you had no income.
Typically, unemployment cover generates a monthly income whereas mortgage cover pays your mortgage directly in appropriately covered circumstances.
Why do policies stress involuntary unemployment?
Some people become unemployed due to reasons they may be responsible for, possibly including:
• resignations;
• dismissals;
• career breaks etc.
Typically, unemployment policies will not pay out in such situations.
Can I get over 50 cover for unemployment?
Typically yes you can get over 50 cover but statistically your chances of being made redundant may typically be a little higher as you get older, therefore, your premiums may also be a little higher too.
How expensive is this insurance?
That depends very much upon the level of cover you select.
As you may imagine, the higher the amount of monthly income you set the policy to provide you with in the event you are unemployed for a qualifying reason, then the more your unemployment cover is typically likely to cost.