Employment/Redundancy Insurance

Bickers70

I currently work for a Local Authority and after surviving massive staffing cuts last year, it has been announced in the local press (a lovely way to find out) that a further 350 - 500 jobs will be at risk before the next financial year. Since the press article, our directors have said that proposals are now being considered but that the number of job losses is likely to be around the 350 mark out of the current workforce of around 10,000.

In some respects I'm quite lucky because my role actually generates income for the Authority and so I am likely to be one of the ones at least risk but of course, there are no guarantees.

I thought it might be prudent to look into employment/redundancy insurance but have been told by a broker that because job losses are imminent I would never be able to claim against any policy I chose to take out.

Whilst I understand this (to a point), it's a bit annoying because the question they ask is "have you been told that your job is at risk?" which I haven't, but then after this latest round of cuts, if I look at this again, would I still be told that I may be subject to the same next year so the same would still apply? I thought the reason for taking out insurance was to provide cover just in case.

Apologies if that sounds a little naive but I could understand it if I knew my job was at risk but as it stands there is probably just as much risk of me crashing my car, being burgled or dying but I'm able to insure myself against those possibilities.

I would be interested to know if anyone has had any experience of this and could offer any advice as to whether it's a worthwhile insurance to take out in the first place?

ACG

I have just queried this with one of my account managers as i would be intrigued to know.

My understanding is though that if you are not under consultation you should be fine.

I will post an update when he comes back to me.

kingstreet

I'd normally agree with ACG on this as it's always been the norm that if you have no specific knowledge of your particular job being in jeopardy you would be accepted.

Some insurers have a list of employers/industries where the risk of redundancy is considered too high to offer cover and they will decline an application rather than try to sort out the mess in the event of a claim.

I'd find the right cover at the right price, then establish the insurer's attitude before you apply.

ACG

....following on from my last message.

One company has said they wouldnt cover you unless you were to get a letter from your boss saying you will not be made redundant in the next round of redundancies. Which is never going to happen. - This surprised me a little as i wasnt expecting that to be the answer.


Another company have said they are 99% sure they would cover you but have gone off to double check with an underwriter, im not sure if they will come back tonight though.
EDIT: They have come back and said they also will not cover it.
"but once the consultation is over and his job is safe, he could apply"

I can see this from both sides. Unemployment cover has taken a huge battering over the last few years and their is an increased risk with yourself at the minute as you know there will be redundancies. If you think about it your both taking a gamble, theyre hoping you carry on paying and dont claim.

I tried, i only tend to use 2 companies for unemployment cover.

Take a look at this:
http://www.defaqto.com/star-ratings/find-product/mortgage-payment-protection-insurance/5

These are all of the 5 star defaqto rated companies. The one on there i have checked is Select & Protect, the rest you may get a better response from.