Redundancy Threat!!! Too late for income protection???

Mayor7

My partner currently works for Woolworths. It is clear from this week's media that the company is in a vulnerable situation and possibly on the brink of administration. Woolworths are trying to sell the company as part of a rescue plan.

As a result, my partner has been looking to take out income protection insurance. The most suitable policy for her is with the Post Office. The policy states that if she is made redundant within 60 days of the policy start date should we not be entilted to make a claim. This seemed reasonable and she was about to go ahead and buy the policy.

However we have just realised that she would not be entitled to claim if she "knew of impending redundancy" when the policy started. The problem is we don't know how this is measured. She has received no direct information from Woolworths and everything has come from reliable media.

Initially she was going to take out the policy and hope that if she was made redundant she would be notified 61 days or more after the policy start date. But now we are uncertain whether she would be entitled to claim at all because of how "knowledge of impendency redundancy" would be determined and classified.

Are we too late for income protection? Any advice would be greatly appreciated.

LittleVoice

I haven't read the terms of the policy.

Check whether there is a cooling off period (7 or 14 days or whatever) so that you can get your premium back easily if you find (from the insurers or this site) that she would not be covered.

I also assume that voluntary redundancy would be excluded: it would have to be a forced redundancy to qualify for a pay out.

CFC

Insurance works on 'utmost good faith' eg if you were privy to gossip at work or were a senior manager, or privy to inside financial knowledge through your work, you may well know informally that there will be redundancies. Assuming your OH is not in this situation, she is in the same position as any onlooker. She has no inside knowledge. I believe that would not then be an issue, as the insurance company has the same opportunity to assess the risk.

it's well worth taking it out.

Scousebird_2

This is a tricky area-at the end of the day, do you know of any impending unemployment unofficially or is this just gossip? At the end of the day, if this policy is accepted by the underwriters, and in the upmost good faith you have not officially been told your job is unsafe then you should be fine to claim. The onus here lies with the underwriter to be honest and whether you are a risk-just because you apply does not necessarily mean that you will be accepted so you have to be careful on your choices.

Try posting this on the insurance board and see if the guys on there can help but I thinking that as long as redundancies have not been announced then you are giving true answers to the best of your knowledge when answering the underwriters questions-you can anly see if they accept your proposal,

Good luck xx

hurricanewyn

We recently tried taking out Mortgage Protection Insurance for my OH who works in banking. He's not specifically under threat, but is concerned about the current climate - the application was accepted online, but a week later we received a letter stating that the underwriters had declined the application, as too risky.
You may well find the same situation in your case

ceridwen

I guess timing is the thing. I did some income protection stuff quite some years ago - because I saw what my future would be like eventually. I am now proving to be correct. But it was many years ago - and no-one, but no-one agreed with me that I was not as secure as they said I was. I honestly seemed to be the only person who could see the "writing on the wall" back then.

I did wonder whether morally I should do this - even though I knew it wouldnt come to the crunch for literally years. But I basically decided that as I was obviously the only person on the planet who could apparently see that I would have problems years down the line - then I would do so.

You are in a very different position - one where darn nearly everyone on the planet CAN see what is about to happen in this case and......errrr....I would have problems with my conscience myself about taking out protection in these circumstances. I think my conscience would probably win in those circumstances - and I wouldnt even try to take out the protection - I would just "kick my backside" furiously for not having taken out the protection way back before either I or anyone else could see there would be a problem (as I could have done so then in good conscience).

Even not allowing for conscience considerations though - I think you will find (correction: I am sure you will find) that it is now too late to do this - as everyone and their dog now "knows the future" here.

I am sorry to hear about this - and wish your GF good luck on the jobfront.

RobertoMoir

Mayor7 wrote: »

She has received no direct information from Woolworths and everything has come from reliable media.

Initially she was going to take out the policy and hope that if she was made redundant she would be notified 61 days or more after the policy start date. But now we are uncertain whether she would be entitled to claim at all because of how "knowledge of impendency redundancy" would be determined and classified.

Are we too late for income protection? Any advice would be greatly appreciated.

I can't help thinking the difference between "reliable media" and "all other media" is that in "reliable media" you're not allowed to consult the tarot cards where the editor can actually see you doing it.

It obviously very much depends on how the insurance company themselves define these terms, but I'd suggest that while your partner has not been warned of impending job losses by woolies, you don't actually have any knowledge of any redundancy at all.