Commenting on unemployment figures, Emma Walker, head of protection at moneysupermarket.com says: “With Government statistics revealing employment levels are down by over 120,000 and redundancy levels have risen by 28,000 over the last quarter, it is no surprise some people may be worried about job security. It is important in such times to ensure you have safeguards in place to cover you against any unplanned unemployment. For those employed in industries at risk of redundancy, you could benefit from making sure you’re in the strongest possible position if job cuts are made and be aware of exactly what you are entitled to from your employer. Unfortunately, looking for any kind of protection insurance at this time might not be the best option as any claim may not be fulfilled if you thought you might be at risk of losing your job. So ensure you seek adequate advice.”
It would also be an idea to review your financial commitments to ensure you’re able to cover all your monthly expenses should the worst happen, as well as ensuring you have access to support where necessary.
The best time to buy a policy is when you least expect to need it, however it may be too late for many people. Unfortunately the small print usually states that payment protection insurance (PPI) is void if the policyholder is aware of impending unemployment. Even if the sector you are employed in has seen mass redundancies, you could be considered to be 'high-risk'. Ensure you have read the small print carefully as exclusions and caveats are commonplace, and get as much information on your policy as possible so you are not in for any shocks. Insuring against unforeseen circumstances in the current economic climate is wise and standalone policies can be well worth the initial outlay.”
Income protection insurance: News update: October 2008