Redundancy insurance

spikey_monkey

Hi, I am in the process of buying a house and have a arranged a first start mortgage with Bristol and West. It involves using a parent as a 'sponsor' and effectively means its a joint mortgage. I am considering taking out redundancy insurance as my work has announced there will be redundancies but I am wondering if I will be able to take this out or will my mum be responsible as she is a joint owner?

_Andy_

Obvious question but got to ask - why on earth are you buying a house when your employer is laying people off?

Dunvegan

You won't qualify for redundancy insurance if your employer has already stated that this is a possibility. The small print will disqualify you and if you lie to get it, they investigate before they pay out and then you're stuffed.

spikey_monkey

I started buying the house before I found out they were laying people off. The company has announced it is making redundancies but hasn't said who will be made redundant, does this mean I do not qualify? Would I qualify once everyone has been informed that is going to be made redundant and I find out I am not one of them?

FSexpert

spikey_monkey wrote: »

I started buying the house before I found out they were laying people off. The company has announced it is making redundancies but hasn't said who will be made redundant, does this mean I do not qualify? Would I qualify once everyone has been informed that is going to be made redundant and I find out I am not one of them?

You should be able to buy PPI (unemployment only) insurance however if you are aware redundancies are in the offing its unlikely any claim would be paid even if your not made redundant in the first round of job losses.

Even if you were not initally aware of possible redundandancy there is always a period at the start of the policy where they will not pay out for redundancy - usually three months. If you loose your job in this time you would not recieve a penny. I would be careful as PPI insurers investigate claims on policies under 12 months and if there is any sign that you may have know you may be made redundant they won't pay.

I'd suggest you hold off buying a house until your job security is a bit clearer.

spikey_monkey

Thanks for the advice. Is PPI insurance the same as redundancy insurance?

dunstonh

PPI is accident, sickness and unemployment insurance but not attached to a mortgage (slightly different rules apply to MPPI than to PPI). Standalone unemployment plans are available as well as the best income protection option which is permanent health insurance. Although they dont include unemployment.

lisyloo

I started buying the house before I found out they were laying people off.

How far are you through the process?
If you have not exchanged yet then you can pull out with no cost.

How long before your company announces which posistions will be made redundant and therefore whether you might be affected?

spikey_monkey

I havent signed the contract yet so can still pull out. I am not overly concerned about the redundancies as only 5-8% are being laid off, plus Im a new grad and the company is really big everyone thinks they wont touch the grads, apparently they didnt last time. Still, theres no guarantees. Can you take out PPI if there has been an announcement of redundancies?

dunstonh

In the last recession, it was typically last in first out as they are the cheapest to make redundant.

lisyloo

You won't be entitled to any redundancy pay if you haven't been there 2 years (unless your employer offers it).

Do you know when an annoucement is expected about which jobs are going?

I would certainly want to stall at least.
Are you in a posistion where you can stall the sellers?
or are you under pressure to go ahead?