What is unemployment insurance?
Unemployment insurance is a type of income protection that pays you a monthly tax-free payment for a maximum of 12 months, should you lose your job involuntarily.
It provides peace of mind should circumstances beyond your control result in you losing your job.
This type of cover is available to anyone who is working more than 16 hours per week, and living and working in the UK. It is linked to how much you earn, and the policy will cover a percentage of your weekly or monthly wages or salary.
The policy will replace the majority of your income, but not all of it. You should not be financially better off should you find yourself unemployed. You should, however, land upon a monthly benefit amount that will allow you to continue to pay your monthly financial commitments and general outgoings.
This insurance will provide a monthly payment to you directly, so that you have enough money to cover key financial commitments while you are looking for a new job. It provides peace of mind so that you can concentrate on getting your career back on track that is in line with your skills and not a stop gap because you do not have an option but to go for a role that will pay the bills.
How does unemployment insurance work?
Unemployment insurance will pay you a monthly tax-free sum known as your benefit amount if you find yourself made unemployed through no fault of your own. Once you have purchased your unemployment policy, you will need to complete an initial exclusion period which is typically 60 to 90 days.
You will need to keep paying the monthly cost or premiums of the policy, and if at any time you are made unemployment or redundant, you will be eligible to make a claim on the policy.
As part of your claim there is criteria you will need to meet to confirm you have a valid claim, which is standard procedure for any insurance claim.
This will include evidence that:
- You are who you say you are e.g. with ID or proof of residency for example
- Evidence of income e.g. payslips or P60’s.
- You may be required to provide evidence of any commitments you may have, like a mortgage or rent payments for instance.
- You will need to register with the Job Centre and obtain a Job Seeker’s Agreement, and you will also need to inform the claims team on what you are doing to find a job, such as job interviews, for example.
- Finally, your previous employer will need to confirm that you have been made redundant and confirm the dates and reasons for your redundancy.
As you can see it is all standard information that you would expect for your claim to be paid.
Cover Up To £2,500 pm