Income/Redundancy insurance – worth having?

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  • Income/Redundancy insurance – worth having?
  • Premier Icon tomhoward
    Subscriber

    Sounds an awful lot like PPI to me, though I’m no expert.

    rudebwoy
    Member

    you get jsa for the first six months regardless of wealth if you have been paying your stamp for the last two years– £71 per week–after six months its means tested……

    peterfile
    Member

    Sounds an awful lot like PPI to me, though I’m no expert.

    What’s wrong with PPI?

    Income protection is certainly a good idea if you don’t have a reasonable amount of savings to cover your outgoings for a while if you are ill or made redundant.

    I’d have thought that you’d really need one or the other (income protection or savings) or you’re taking a pretty big risk.

    How long would you last if you lost your job tomorrow? If the answer is “long enough” then you’ve got nothing to worry about and definitely don’t need income protection 🙂

    £800 a year sounds about right if that’s illness + redundancy.

    AlasdairMc
    Member

    If your company is solvent and you’ve been there long enough to get a decent payoff, it’s not worth it. It won’t pay out if you get sacked as opposed to being made redundant, so the only thing it’s good for is illness cover which you may have in life assurance already.

    Premier Icon DezB
    Subscriber

    No savings due to, er, circumstances. Company pays out ok for redundancy and been with company over 10 years. But that’s all I’d have.

    peterfile
    Member

    you’ve been there long enough to get a decent payoff

    What’s the stat minimum, 1 week for every year? You’d need to have been there quite a while to get a decent amount.

    Also depends on what you do I suppose. If you’re quite specialised and the arse falls out of your industry, then it will be harder to find work than if there are lots of other options available to you.

    When firms were laying off loads of people in 2008-2010, quite a few of my competent mates were out of work for up to 12 months. That’s a lot of unpaid bills. Most took random jobs to try to stay afloat, but even that wasn’t working well.

    Premier Icon DezB
    Subscriber

    I like the fact that you have to keep paying the premiums after you’ve lost your job!

    Premier Icon rickmeister
    Subscriber

    I had this and it really helped.

    Started it after picking up the vibe that redundancies were on the cards. Paid for cover for 4 months and then got made redundant. The option or premium I paid gave me a replacement income of £1100 pr month.

    Job centre completely aware of people needing evidence of signing to claim the insurance and good with paperwork.

    It would run for 12 months then stop.

    Insurance company wont give an easy ride so don’t expect to have a paid year off. Insisted on documented evidence of job seeking, interview appointments etc but it did take the strain off the financials whilst I set myself up again.

    The company I was with for 13 yrs awarded everyone legal minimum redundancy so that was just over £5k which obviously wouldn’t go very far. Insurance was a great help but I hadn’t been paying into it for years though.

    Premier Icon DezB
    Subscriber

    Thanks for that. Will check over my policy doc tonight.

    Premier Icon DezB
    Subscriber

    I’ve been paying around £800 a year for this, seems like a ridiculous amount! Checking on the insurance guide you can only claim if you are on Job Seekers allowance… now, if I got a redundancy payout I wouldn’t be entitled to Job Seekers allowance until it ran out, would I?

    If any joblesstrackworld members have good experience of Income Insurance let me know!

    (I also notice Barclays no longer sell it)

    peterfile
    Member

    Another thing to think of Dez, is what options you have.

    For example, if you live in rented accommodation by yourself and your car is owned and you have very little or no debt, it might not be the end of the world if you lost your job (from a financial perspective). You could ditch the lease and stay with family/friends until you found another job, with little outgoings and no significant financial commitments to worry about.

    However, if you’re the sole or main breadwinner in a family and you’ve got a mortgage and some debt (car loan etc) then losing your job could have less manageable consequences.

    Could you just stop paying most of your bills without repercussion?

    If your monthly commitments are medium/high, being out of work for even 6 months could have a pretty long lasting impact.

    I had a wake up call in 2008/2009 when a number of close friends/colleagues lost their jobs. I had bugger all savings and not insignificant monthly outgoings I took out insurance to cover me until i had enough saved as backup. Really took away a lot of worry during some pretty uncertain times in my industry.

    Premier Icon DaveRambo
    Subscriber

    Lots of good comments above.

    In the end it will depend on your personal circumstances.

    I decided to self-insure

    My approach was
    Work out a worse case scenario and decide how I would cope.
    If I had no income for a period of time what would I do, how much would I need to live on, what can I cancel etc

    I then made sure I had enough money saved up to live for 6 months.

    I figure if I’m able to work I can find something I want to do in that time.

    If I’m ill and can’t work then I am covered by my current employer for a % of my salary as a benefit that’s provided at no cost to myself.

    If you have dependants it’s a sensible thing to think about in advance and having rainy day money like this removes a lot of financial stress.

    dirtycrewdom
    Member

    you get jsa for the first six months regardless of wealth if you have been paying your stamp for the last two years– £71 per week–after six months its means tested……

    This is incorrect. Well, perhaps it has changed in the last 3 years but when I tried to claim I wasn’t able to get anything because I had savings of more than 6k.

    rudebwoy
    Member

    This is incorrect. Well, perhaps it has changed in the last 3 years but when I tried to claim I wasn’t able to get anything because I had savings of more than 6k.

    you must have been self employed then–if you have paid your stamp you get non means tested jsa for six months — it happenened to me last year

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