Unemployment/income protection insurance - payment in lieu

Hi all,
New to the forum, unfortunately the first post is around a situation I am currently in the middle of & am seeking any guidance or advice for others who may have been through the same thing. I've not been through this before myself, hence the question.

I was recently made redundant (last day was 28th Feb) but thought I was ok as I had unemployment cover through Legal & General (not eligible for stat redundancy due to only be there 1 1/2 years). Under the terms of my contract, I was eligble for 3 months notice, for which the company paid me in lieu, plus other money owed under their obligations.

I submitted a claim to L&G and after much toing & froing over about a month, they finally rang to say they accepted my claim, but were not going to make the first payment until the notice in lieu period had expired (Jun 1st). They are using this date to then calculate the deferred period of 30 days - all meaning I do not receive any sort of payout from L&G until Jul 31. This leaves me in somewhat of a financial predicament, having a faimly to support (the reason why I took out this cover in the first place).

I was under the impression that any deferred period started from the date I was made redundant & any payment in lieu would not have any impact on my claim. My question is, does this sound right or are L&G taking the proverbial?

Cheers in advance for your thoughts on this.

Comments

  • comeandgo
    comeandgo Posts: 5,726
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    You have been paid up to end of May, your policy says 30days deferment so they must be paying you in arrears which seems right in my opinion.
  • InsideInsurance
    InsideInsurance Posts: 22,460
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    Would need to read the terms of your policy but this is the normal way it is handled.

    Deferment periods reduce the price of the policy but you shouldnt take a deferment longer than you can afford to live without pay.

    When you take cash in lieu of notice your normal notice period is effectively added on to the deferment period as you have been paid for this already.
  • dunstonh
    dunstonh Posts: 115,904
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    I was under the impression that any deferred period started from the date I was made redundant & any payment in lieu would not have any impact on my claim. My question is, does this sound right or are L&G taking the proverbial?

    L&G are correct. PILON effectively extends your leaving date. So, whilst you may have stopped going into work on 28th Feb, your leaving date wont be until May.

    If it had been paid as a redundancy payment and not PILON then L&G would not have taken it into account.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • applecrate
    applecrate Posts: 6
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    Apologies for not thanking you all a little sooner for your replies & advice - it's been a bit busy on the job hunt front. This is now much clearer for me & at least I know where I stand with them now.

    Thanks again for your help!! :T
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