Does Income Protection Cover Redundancy?

It would be easy to assume that insurance protecting income would cover redundancy, but in actual fact income protection only covers time off work as a result of illness or injury. Therefore, if you’re laid off because of redundancy, fired from your job, or demoted you won’t be able to claim any lost earnings through an income protection policy.

There are two types of income protection insurance: short and long. The difference between the short and long term policy simply refers to the length of time you can claim. Short term may cover from a few months to two years, whereas long-term policies tend to start from a minimum of five years.

Neither of these policies cover redundancy.

So, if you want insurance to cover the risk of being made redundant, what are your options?

• Unemployment Insurance

If you want to get an income insurance policy that protects against you losing your job, unemployment insurance is a suitable option for you.

• Mortgage Payment Protection Insurance

You can take out this policy at the same time you get a mortgage, and it can cover you for up to 12 months after your earnings have ceased. This will give you time to get back on your feet and hopefully secure new employment.

• Payment Protection Insurance

Payment protection is another insurance product that can cover you in the event of accidents, sickness and unemployment – which includes redundancy.

To find out whether income protection is the right type of cover for you, speak to Agentis today. Our friendly and professional team can talk you through the different options available to you and find the best policy for your requirements and make sure you’re covered.