Unemployment Insurance Extended
unemployment insurance extended
understanding Income Protection Insurance
If you are afraid of becoming unemployed or are thinking about purchasing income protection in the UK, then take notice of the five things they don't (or may neglect to) tell you about when selling you an income insurance policy.
1. How long before you can claim.
With regards to unemployment insurance check the excess period of the policy for unemployment claims. There is often a waiting period that starts when you take out the policy, before claims will be honoured.
The qualification period options vary by policy are always detailed on the policy documentation. Quite often you can save many pounds by agreeing to a longer period during which you cannot claim.
2. Pay the Premium monthly.
All income protection insurance policies are monthly cover with the premiums usually paid monthly in advance by direct debit.
Because they only cover you on a month by month basis as long as you pay the premium, it is now very easy to shop around and get better cover at a much fairer premium.
Remembering the exclusion period, and say it costs you £30 per month per £1000 worth of monthly income benefit (which is incidentally quite expensive compared to the independent suppliers) a £120 outlay would secure you income benefit each month of £1000 from the New Year this year to Christmas next year, by when you should hopefully be back on your feet.
3. Move to a New Income Protection Provider. Cheaper Income Protection can be purchased from an independent ASU provider on the internet. If you bought your income insurance cover from a bank or building society you could be paying five times the premium and should consider changing supplier immediately.
Because you pay you premiums monthly if you already have income protection insurance in place, you may need to cover two premiums for the exclusion period if you purchase a new policy, which could prove expensive during the exclusion period.
4. A Voluntary Excess Period.
An excess period should not be confused with an exclusion period..
Excesses vary considerably by income protection policy and longer excess periods generally mean cheaper premiums.
This may not always be in your best interests, so many of the independent income protection insurance suppliers now offer policies which have 'back-to-day-one cover'.
For example, if you take out cover and then made a claim on the 1st of May you would wait until the 31st of May before receiving any benefit but the payment would be for the entire period you are unemployed or disabled from the 1st of May.
5. Shop around for cover.
If ever there was an insurance cover where it pays to follow the rule of 'shop around', then Income Protection Insurance is one.
With so many offerings and variances in benefits and premium rates, on the market it can get confusing. A recent report by the credit Commission in the UK accused the major lenders of anti-competitive practices and mis-selling of PPI and one area for example, where they are pushing for legislation in January, is by disallowing loan protection insurance to be sold alongside the loan or within 14 days of having sold a credit service to a customer, allowing that customer to for example surf the net for alternative IPPI products.
Emergency Extended Unemployment Compensation Act
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