worth doing? legal?

mariel_3

Hi,
my employers are currently resturcturing and there is a possibility I may be made redundant.
Should I take out a loan ( or even a 0% credit card) with redundancy protection, stick the cash in an interest account and expect my payments to be covered if the worst happens.
It would help tide me over while I find a new job but I'm not sure if it would be worth doing....or even legal / moral?
any thoughts?
-m

Wig

You better be quick. I dunno whether or not it is fully legal, but at this point in time you don't know if you will be redundant or not so I would say go for it. You will usually only be covered for 12 months.

Don't borrow too much though, I hate being in debt it's not a good place to be. and try to get a loan with no early repayment penalties (if such a thing exists) when you are back on your feet make sure you pay off the loan, don't spend the money on crap.

mrcow

If you are looking at taking out an interest accruing loan for this purpose, then I think that you are playing a dangerous game. Please consider:

1. That you will be paying interest on the debt until a point where the insurance may (or may not!) take over
2. The insurance may not cover you if they discover that you were aware of the redundancy threat
3. It will only cover you anyway whilst you are out of work....a situation you'd be looking to rectify ASAP anyway (unless you have unlimited savings and financial resources and don't actually need a job?)
4. You'll be paying a high premium for this insurance anyway and it's often added to the value of the loan with high tieins so you'll pay interest on this over the loan period, would the interest that you earned from the money in your savings cover it
5. Some of these policies don't actually kick in until for example a 60 or 90 day period has passed
6. Some policies will only pay the minimum repayments or just the interest on a loan

And I've not even touched on the legal aspect of this (I wouldn't know where to start) or ERCs that may apply.

If you really do have the threat of redundancy looming over your head, do you not think that your efforts would be much better directed to

a. protect your current job against redundancy
b. make sure that if you do lose you job, you're in a position to find a new position as soon as you can (update your CV, start checking agencies/job sites/papers etc and put the 'feelers' out with any contacts that you have)

mrcow

Sorry to add to post, the other alternative is to just forget about the loan plan and consider whether you'd like to take out insurance against losing your job anyway to cover (for example) mortgage repayments?

Again, many of these policies have a 30 to 120 day exclusion period, and they may be quite pricey? It's up to you, and I suppose it depends on how confident you are about keeping your job, or how determined you are to find another.

Savvy_Sue

I may be wrong, but I thought some of these polices didn't cover you if anything happened against which you were insured for the first 6 or 12 months!

Plus I am certain if they knew you were aware of a threat of redundancy they would not pay out.

Agree that the best bet is to make yourself indispensible, and update your cv while you're at it!

Former_MSE_Abuse_Controller

As far as i know, if you are aware or there is a chance that you may lose your job to redundancy and you apply for redundancy protection, this is fraud. I don't think this thread needs to continue.