Redundancy/Unemployment cover question about exclusion period and job notice

RobHT

Hi, I was wondering how this kind of insurance really works.
In my case, I need an unemployment insurance for income protection, no mortgage.

I read many controversials online, but also many rules .

I understood the following, the exclusion period is what it is, but the coverage can start after considering the notice period in addition to the exclusion period, which in my case it's one month, so let's assume 4 months in total.

Questions
1. If I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

2. What happens to the last salary given by the company or any compensation?
I think that the last salary of the company doesn't count in the insurance pay out evaluation, but the following yes:
- Any amount coming from the redundancy settlement, in good or bad terms.
I don't agree with it, but I think they are gonna substruct that amount to the possible coverage of the months requested, which can easily nullify the payout from the insurance, easily to 0 in most cases...

RobHT

In the description, I found the following: it doesn't cover any period for which you have received a payment instead of working a notice period.

It's quite confusing, do they mean that if I receive 20k as a redundancy pay (randomly chosen), then 20k will be used to substruct the amount of money they will give me?
Assuming they give me 2k per month after the waiting period of 30 days, basically I'll never receive the payment from them?  

(the cost of this kind of insurance, that includes also sickness and accidents is 50 pounds for me, which sums up to 70 of critical illness, so 120, quite heavy on my wallet...)

400ixl

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

RobHT

400ixl said:

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

Thank you.
In my case it would be one month notice as stated in the contract, as well as the majority of people in UK I believe, the UK market is not stable like in central EU, or definitely it works in a different way, I don't think that anyone offers 3 months notice.

So in my case, I can start the claim after I completely ended the work relationship with the employer.

Do you know what happens in this case?
I've subscribed a few days ago, if I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

Does it go in contrast in anyhow with any company package? At the moment, it's offered by the company in terms of sickness and accident only. As far as I know, only the life insurance (for death) could go in contrast.
(my personal package has all of them, no other choice, so it's about unemployment, accident, sickness)

Sandtree

RobHT said:

400ixl said:

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

Thank you.
In my case it would be one month notice as stated in the contract, as well as the majority of people in UK I believe, the UK market is not stable like in central EU, or definitely it works in a different way, I don't think that anyone offers 3 months notice.

So in my case, I can start the claim after I completely ended the work relationship with the employer.

Do you know what happens in this case?
I've subscribed a few days ago, if I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

Does it go in contrast in anyhow with any company package? At the moment, it's offered by the company in terms of sickness and accident only. As far as I know, only the life insurance (for death) could go in contrast.
(my personal package has all of them, no other choice, so it's about unemployment, accident, sickness)

It would help if you could link to the policy wording as each policy is unique and whilst there are common approaches there are always exceptions. 

Average notice period varies significantly between industries and seniority... certainly were I an employee still I would have a 3 month notice period. As has been discussed already, if you are made redundant and paid in lieu of notice then the insurer will effectively consider your leaving date as what it should have been had you worked your notice instead. 

Once the effective end date has been calculated then most ASU policies will have a deferment period which reduces your premiums because you won't be able to claim during this period. So if you have selected a short 3 month deferment then you can claim for month 4 of your unemployment. 

RobHT

Sandtree said:

RobHT said:

400ixl said:

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

Thank you.
In my case it would be one month notice as stated in the contract, as well as the majority of people in UK I believe, the UK market is not stable like in central EU, or definitely it works in a different way, I don't think that anyone offers 3 months notice.

So in my case, I can start the claim after I completely ended the work relationship with the employer.

Do you know what happens in this case?
I've subscribed a few days ago, if I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

Does it go in contrast in anyhow with any company package? At the moment, it's offered by the company in terms of sickness and accident only. As far as I know, only the life insurance (for death) could go in contrast.
(my personal package has all of them, no other choice, so it's about unemployment, accident, sickness)

It would help if you could link to the policy wording as each policy is unique and whilst there are common approaches there are always exceptions. 

Average notice period varies significantly between industries and seniority... certainly were I an employee still I would have a 3 month notice period. As has been discussed already, if you are made redundant and paid in lieu of notice then the insurer will effectively consider your leaving date as what it should have been had you worked your notice instead. 

Once the effective end date has been calculated then most ASU policies will have a deferment period which reduces your premiums because you won't be able to claim during this period. So if you have selected a short 3 month deferment then you can claim for month 4 of your unemployment. 

Thank you.

I didn't find the wording about my last question... I found only the one I quoted.

I've chosen 30 days deferred period, which makes it quite expensive (50 pounds) but still good so I take the income soon, in any case it's the cheapest I found... These days, it looks a decent price...  
I don't know what's gonna happen with the inflaction after many years, it doesn't seem to be included in the contract... Do they ask a re-negotiation after a few years?

Sandtree

RobHT said:

Sandtree said:

RobHT said:

400ixl said:

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

Thank you.
In my case it would be one month notice as stated in the contract, as well as the majority of people in UK I believe, the UK market is not stable like in central EU, or definitely it works in a different way, I don't think that anyone offers 3 months notice.

So in my case, I can start the claim after I completely ended the work relationship with the employer.

Do you know what happens in this case?
I've subscribed a few days ago, if I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

Does it go in contrast in anyhow with any company package? At the moment, it's offered by the company in terms of sickness and accident only. As far as I know, only the life insurance (for death) could go in contrast.
(my personal package has all of them, no other choice, so it's about unemployment, accident, sickness)

It would help if you could link to the policy wording as each policy is unique and whilst there are common approaches there are always exceptions. 

Average notice period varies significantly between industries and seniority... certainly were I an employee still I would have a 3 month notice period. As has been discussed already, if you are made redundant and paid in lieu of notice then the insurer will effectively consider your leaving date as what it should have been had you worked your notice instead. 

Once the effective end date has been calculated then most ASU policies will have a deferment period which reduces your premiums because you won't be able to claim during this period. So if you have selected a short 3 month deferment then you can claim for month 4 of your unemployment. 

Thank you.

I didn't find the wording about my last question... I found only the one I quoted.

I've chosen 30 days deferred period, which makes it quite expensive (50 pounds) but still good so I take the income soon, in any case it's the cheapest I found... These days, it looks a decent price...  
I don't know what's gonna happen with the inflaction after many years, it doesn't seem to be included in the contract... Do they ask a re-negotiation after a few years?

ASU is an annual policy unlike PHI which is the full fat version of income protection but doesn't cover unemployment traditionally. Premiums will be updated each year and you are free to change the sum insured at renewal if you want to too. PHI which is a form of long term insurance gives you the option to index link the sum insured and premiums but otherwise the premiums don't change for the full duration of the policy.

RobHT

Sandtree said:

RobHT said:

Sandtree said:

RobHT said:

400ixl said:

If you receive a payment in Lieu of notice (PILON) you would not get any payment for the period that covers.

So if the company had to give you 3 months notice, but instead made your redundant immediately terminating your employment and instead paid you those 3 months as a lump sum, you would not be entitled to any insurance payment for that period of time as your employer will have paid your salary for that time.

The redundancy lump sum is a different figure.

Thank you.
In my case it would be one month notice as stated in the contract, as well as the majority of people in UK I believe, the UK market is not stable like in central EU, or definitely it works in a different way, I don't think that anyone offers 3 months notice.

So in my case, I can start the claim after I completely ended the work relationship with the employer.

Do you know what happens in this case?
I've subscribed a few days ago, if I'm made redundant tomorrow, what happens to the coverage? Will it start in 4 months, or it will be invalidated because the period "was not covered"? (If I can say it in that way)

Does it go in contrast in anyhow with any company package? At the moment, it's offered by the company in terms of sickness and accident only. As far as I know, only the life insurance (for death) could go in contrast.
(my personal package has all of them, no other choice, so it's about unemployment, accident, sickness)

It would help if you could link to the policy wording as each policy is unique and whilst there are common approaches there are always exceptions. 

Average notice period varies significantly between industries and seniority... certainly were I an employee still I would have a 3 month notice period. As has been discussed already, if you are made redundant and paid in lieu of notice then the insurer will effectively consider your leaving date as what it should have been had you worked your notice instead. 

Once the effective end date has been calculated then most ASU policies will have a deferment period which reduces your premiums because you won't be able to claim during this period. So if you have selected a short 3 month deferment then you can claim for month 4 of your unemployment. 

Thank you.

I didn't find the wording about my last question... I found only the one I quoted.

I've chosen 30 days deferred period, which makes it quite expensive (50 pounds) but still good so I take the income soon, in any case it's the cheapest I found... These days, it looks a decent price...  
I don't know what's gonna happen with the inflaction after many years, it doesn't seem to be included in the contract... Do they ask a re-negotiation after a few years?

ASU is an annual policy unlike PHI which is the full fat version of income protection but doesn't cover unemployment traditionally. Premiums will be updated each year and you are free to change the sum insured at renewal if you want to too. PHI which is a form of long term insurance gives you the option to index link the sum insured and premiums but otherwise the premiums don't change for the full duration of the policy.

Interesting, thank you.
In my case it's an all in one package, I wished it was one by one...
I didn't know about PHI, I should take a separate insurance for that, the monthly expense will increase around 150-160 per month ................
I still didn't count my life insurance, that currently is provided by my employer............................................

Sandtree

PHI would replace the AS and is a much better product hence the price difference.... its price is fixed, your insurers cannot cancel it other than for non-payment and it pays out until you retire or are fit to return to work. AS pays out for 1 or 2 years and that's it. The average PHI claim is just over 6 years which means even those with good AS policies receive 4 years less income

As was reported on the Insurance section here, when covid struck many people found their ASU providers cancelled the policies or if they offered renewals it had gone up 3-4x than the last year... those with PHI insurers couldn't cancel and couldn't increase premiums. 

RobHT

Sandtree said:

PHI would replace the AS and is a much better product hence the price difference.... its price is fixed, your insurers cannot cancel it other than for non-payment and it pays out until you retire or are fit to return to work. AS pays out for 1 or 2 years and that's it. The average PHI claim is just over 6 years which means even those with good AS policies receive 4 years less income

As was reported on the Insurance section here, when covid struck many people found their ASU providers cancelled the policies or if they offered renewals it had gone up 3-4x than the last year... those with PHI insurers couldn't cancel and couldn't increase premiums. 

I didn't notice that they can cancel the policy, !!!!!!... The renewal price should not exceed the inflaction rate as increase, or not?

Anyway, the issue is that no one offers unemployment insurance standalone, at least now..
Then, what about the normal sicknesses? You normally don't get sick for so long, otherwise it would be a critical illness, am I wrong?

My critical illness includes a lump sum of 150k, but it's just about critical illness which includes also premium stuff, that is, more common health complications. That costs me 72 a month... Back then, I thought that this was the first thing to insure, but now things summed up and I need to manage better these deals  

Sandtree

RobHT said:

Sandtree said:

PHI would replace the AS and is a much better product hence the price difference.... its price is fixed, your insurers cannot cancel it other than for non-payment and it pays out until you retire or are fit to return to work. AS pays out for 1 or 2 years and that's it. The average PHI claim is just over 6 years which means even those with good AS policies receive 4 years less income

As was reported on the Insurance section here, when covid struck many people found their ASU providers cancelled the policies or if they offered renewals it had gone up 3-4x than the last year... those with PHI insurers couldn't cancel and couldn't increase premiums. 

I didn't notice that they can cancel the policy, !!!!!!... The renewal price should not exceed the inflaction rate as increase, or not?

Anyway, the issue is that no one offers unemployment insurance standalone, at least now..
Then, what about the normal sicknesses? You normally don't get sick for so long, otherwise it would be a critical illness, am I wrong?

My critical illness includes a lump sum of 150k, but it's just about critical illness which includes also premium stuff, that is, more common health complications. That costs me 72 a month... Back then, I thought that this was the first thing to insure, but now things summed up and I need to manage better these deals  

No, price will increase to reflect inflation, claims experience and the fact you are getting older hence people saw prices increasing four fold in 2020. PHI gives you certainty on premiums and you won't be priced out when you get older and are more likely to claim.

Critical illness is explicit conditions to explicit levels as defined on the day you bought it, there are plenty of other things that can take you out of work long term that doesn't trigger CI cover particular when you consider medical progress... on old CI policies certain heart conditions required you to have open chest surgery to be able to claim but what used to be done by major surgery can now be done by keyhole so claim is declined. It can go the other way too... people can be lucky and recover from their CI and return to work now mortgage free etc.

For me personally, PHI is the most important insurance as you can still pay your mortgage if your income is still being paid by the PHI. CI is more of a secondary consideration if you have spare cash