Redundancy insurance questions

parsamonious

Can anyone offer some advice please to some possibly obvious questions?

We (DH and I) have what we thought were untouchable jobs when it comes to redundancy but as the economic climate gets worse we now worry that I may be made redundant in the coming year or 2. No one has suggested that will happen but I work in local Government and it's happening in other authorities so could easily happen in mine.

We took out our mortgage (of £230k) 2 years ago when we moved and didn't take the redundancy insurance offer so obviously we are now considering this.

My questions, assuming we take the insurance cover out:

- if I am made redundant I would probably get 6 months pay - would the insurance not kick in until that runs out?
- would I be entitled to any job seekers allowance or would this to not kick in until the redundancy pay is gone?
- is there anything else we need to be thinking about before we take the insurance policy out?

Can anyone help please?

Thanks very much

motorguy

parsamonious wrote: »

- if I am made redundant I would probably get 6 months pay - would the insurance not kick in until that runs out?

The redundancy insurance would kick in as soon as you can claim JSA. This is paid independently of any redundancy payment you would get. You would be eligeable to claim JSA the day after your contract terminates, and normally redundancy insurance starts one month after that. The only exception would be if you were put on garden leave for a period of time - you can claim neither JSA nor your redundancy insurance until after that time.

parsamonious wrote: »

- would I be entitled to any job seekers allowance or would this to not kick in until the redundancy pay is gone?

You effectively *have* to claim JSA to get the redundancy insurance to pay out (your dole office have to fill out a form each month to show you are still claiming). You get the £65 JSA weekly payment irrespective of having the redundancy insurance.

parsamonious wrote: »

- is there anything else we need to be thinking about before we take the insurance policy out?

I would take it out ASAP as the longer you have it before redundancy the less grounds they would have to query it. Any complaints i've seen on here have been around people taking out insurance then (coincidentally) getting made redundant a few months later. The insurance company may then start to query that and people then get *offended*.

I've income replacer insurance from Abbey. Its under their paymentcare scheme and it pays out £1500 a month if i'm made redundant. They also pay the insurance premium for you during this time, so thats another £65, and i get JSA of around £290 a month. This is the second time i've claimed off them in the five years i've had it and no issues at all with them.

Hope this helps!

parsamonious

Thanks very much for your response Paul. Time for action I think. Most LA's are saying no compulsory redundancies right now but if they need to they can always find a way. I can truthfully say that redundancy has not been discussed by my employer before I take out the policy and all I'm doing is preparing for the possibility that it could happen in the next 2 years.

Thanks again.

Judith_W

Sorry to jump on your thread OP, but I work for a company that provides childcare vouchers and with the news that CCVs will be scrapped if Labour get in, my job is less secure that it was (and gone IF Labour does get in). Am I still able to get redundancy insurance?

TEDDYRUKSPIN

Correction from the above:

- if I am made redundant I would probably get 6 months pay - would the insurance not kick in until that runs out?

Even if you claim for JSA successfully, no unemployment cover will pay out until the redundancy payment has been used up.

i.e. for every year you worked for the company, you get 1 week redundancy pay. If you have worked for ten years, you get 10 weeks wage. Say you are made redundant and you have redundancy cover, the company will pay out from the following:

(1) You make a successful claim for JSA and you obtain the JSA agreement.
(2) All redundancy payments are used up (i.e. 10 weeks as above).
(3) 30 days wait from date of claim. Some companies will pay back.

Also, depending on the company you choose, you must look out for the following:

(1) Ask if the cover has 'waiver of premium' - what this means is that if either of you are made unemployed, you do not have to pay the monthly premiums. If it does not have this, you must continue to pay this premium of cover.

Now, all unemployment cover is reviewable! Meaning it will go up as the company wishes. As most people have seen in the last 2 years, most cover has increased from £18p/m for £800p/m cover to £50p/m for £800p/m cover.

Some only pay out for the first 12 months and then stops. Some upto 24 months.

I greatly suggest you to do one of the following:

(1) Shop around alot! I mean alot! Read the policy thoroughly if you are planning to do this;
(2) Use a decent independent whole of market financial adviser!

Finally - WORD OF WARNING! If you have heard any signs of redundancy in your neighbour of woods, the company will not pay out! They will be happy to take the money but will not pay out!

motorguy

TEDDYRUKSPIN wrote: »

Correction from the above:

- if I am made redundant I would probably get 6 months pay - would the insurance not kick in until that runs out?

Even if you claim for JSA successfully, no unemployment cover will pay out until the redundancy payment has been used up.

i.e. for every year you worked for the company, you get 1 week redundancy pay. If you have worked for ten years, you get 10 weeks wage. Say you are made redundant and you have redundancy cover, the company will pay out from the following:

(1) You make a successful claim for JSA and you obtain the JSA agreement.
(2) All redundancy payments are used up (i.e. 10 weeks as above).
(3) 30 days wait from date of claim. Some companies will pay back.

Sorry, but this is wrong. Redundancy payment has nothing to do with claiming off the insurance. Trust me on this one - i've done it twice now. They have paid out after the one month initial period.

TEDDYRUKSPIN wrote: »

Also, depending on the company you choose, you must look out for the following:

(1) Ask if the cover has 'waiver of premium' - what this means is that if either of you are made unemployed, you do not have to pay the monthly premiums. If it does not have this, you must continue to pay this premium of cover.

Now, all unemployment cover is reviewable! Meaning it will go up as the company wishes. As most people have seen in the last 2 years, most cover has increased from £18p/m for £800p/m cover to £50p/m for £800p/m cover.

I dont see how the historical increases are relevant? Mine has went up from £50 to £62 in five years. Still well worth paying. Thats for £1500 of cover, plus they pay the premiums and i claim JSA.

TEDDYRUKSPIN wrote: »

Finally - WORD OF WARNING! If you have heard any signs of redundancy in your neighbour of woods, the company will not pay out! They will be happy to take the money but will not pay out!

The general scenarios where i've heard they dont pay out is that people take out insurance, declare they have no information that they are going to be made redundant, then miraculously get made redundant 3 months later OR if there is a recent large round of redundancies in the organisation, they will use that as evidence that you knew it was coming.

If the O/P takes out the insurance AND there has been no recent redundancies AND say in a years time they're made redundant, i dont think there will be any issue with payout.

I would agree with shopping around. I would recommend looking at Abbey's offering though as i've had it this past four years and am currently in my second claim period with absolutely no issues at all.

TEDDYRUKSPIN

pgilc. All I can say you are lucky as most or all insurances now stand on the reply I stated above. I have looked at nearly all these insurances and they all state the same.

motorguy

TEDDYRUKSPIN wrote: »

pgilc. All I can say you are lucky as most or all insurances now stand on the reply I stated above. I have looked at nearly all these insurances and they all state the same.

Are you sure? I've just checked Abbeys terms and conditions online and they specifically say they pay out from the 29th day of unemployment onwards?

http://www.abbey.com/csgs/StaticBS?blobcol=urldata&blobheader=application/pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1223396066994&cachecontrol=immediate&ssbinary=true&maxage=3600

I cant see Abbey making themselves the exception?

I'm positive my wifes is the same and hers is with a different company.

The exception might be pay in lieu of notice, but there seems to be no link to redundancy payment.

It would be worth the O/P confirming that point should she go ahead.

If what you're saying is correct, it would seem odd, would you not agree, that someone who pays £50 a month for say, £1000 of cover and gets 6 months redundancy payment, gets a worse deal with the insurance than someone who pays the same £50 a month for the same £1000 of cover, but only gets a weeks redundancy payment?

Queen-Bee_2

TEDDYRUKSPIN wrote: »

pgilc. All I can say you are lucky as most or all insurances now stand on the reply I stated above. I have looked at nearly all these insurances and they all state the same.

Mine doesn't - I am with Paymentshield and started claiming in July
QB

TEDDYRUKSPIN

Thats great for the above I say.

http://www.paymentshield.co.uk/consumer/mppi/

page 13 states payment in lieu.

Anyway, paymentshield is one of the best insurance company to take. They revised the wording of the redundancy statement which others have not. Impressed to be honest.

Queen-Bee_2

Hi Teddy - glad to be of help. Don't forget that PILON is treated differently to the actual redundancy payment. Paymentshield have been very good. I was dreading having to deal with them, as I'd assumed that as with most insurance companies they'd try and wriggle out of their obligations, but my fears proved groundless. They are helpful and prompt payers.
QB