Designed specifically to take care of you when you’ve unexpectedly lost your job, so you can set about looking for the Best replacement for you without worrying over financial pressure.
What is Unemployment protection insurance?
Unemployment protection insurance may sound intimidating, but it’s essentially a safety net for unexpected job loss. Like accident and sickness insurance, it’s a personal policy tailored to your situation, acting as a financial lifeline if you lose your job.
If you lose your job through no fault of your own, your policy will pay a monthly benefit — up to £2,500, depending on your income. Once you return to work, the payments stop, but the policy remains active as long as you continue to pay, ensuring you’re covered if you lose your job again.
Why is unemployment protection insurance important for UK residents?
While UK residents might be able to get benefits like Universal Credit when they’re unemployed, the unfortunate truth is that most UC payouts aren’t enough to live off of even in the short-term. With unemployment protection insurance, you can get up to 65% of your pre-redundancy income covered, which means you’ll be able to keep up with most of the financial commitments you’ve previously had to cover. Whether that’s a mortgage, rent, or even just your weekly shop, it’ll all be covered by your unemployment protection insurance.
With the cost of living crisis in the UK, unemployment protection insurance has become an invaluable safety net for UK residents in case the worst should happen. No one wants to be left worrying about how they’re going to pay their mortgage or rent, or how they’re going to put food on the table. With unemployment protection insurance, you don’t have to!
Benefits of Our Insurance
Financial Support During Job Loss
- Provides regular monthly payouts if you are made involuntarily redundant.
- Provides regular monthly payouts if you are made involuntarily redundant.
Reliable Income Protection When You Need It Most
- Offers financial stability during periods of unemployment without relying solely on state benefits.
- Allows you to maintain your lifestyle and financial commitments during career transitions.
Financial Stability During Unemployment
- Reduces the stress and uncertainty associated with sudden job loss.
- Gives you the freedom to focus on securing new employment without immediate financial pressure.
How Unemployment Protection Insurance Covers You
Unemployment protection insurance is a valuable safety net for anyone concerned about financial stability. It replaces your income if you lose your job through no fault of your own, such as redundancy.
After a short ‘excess period’ (chosen when you purchase the policy), the insurance provides temporary income to cover essential expenses while you find your next steps. Coverage typically lasts up to 12 months per claim. For example, if made redundant, you could receive a monthly payout of £2,500 for up to a year after your 30-day excess period.
Even after the 12 months, your cover doesn’t end. Once back in work, you’re free to claim again if you lose your new job in the future. Designed to provide lifelong support, unemployment protection insurance ensures peace of mind so you can focus on living, not worrying.
.Key Features
Claim periods & policy terms
You can usually claim for up to 6 or 12 months, depending on the income protection policy. Policies typically exclude pre-existing conditions, substance use, self-harm, and voluntary unemployment. If you have complex health needs, a tailored policy may be best
Coverage for Salaried and Self-Employed
Choose short-term or longer-term coverage as per your needs.
Excess periods
Plans available based on employment type.
Secure Your Coverage in Minutes!
Claim Your Insurance
To file an income protection insurance claim, contact your claim administrator immediately using the details in your policy. They’ll guide you through the process, including forms and required documents. Claims typically take around 30 days; if delayed, follow up with your insurer. For excessive delays or unfair denials, escalate to the Financial Ombudsman Service.
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Top Providers of Unemployment Protection Insurance in the UK
Several factors can affect how much your income protection insurance costs, including:
- Your age (with higher premiums for older policyholders)
- Your job (for example, someone who works in a high-risk job like construction would pay more than someone who works a job that’s comparatively lower-risk)
- Your salary (this affects how much money you could claim a month, which affects what you have to pay to keep your cover)
- Your health (you might pay more if you smoke, for example, and pre-existing conditions will always be excluded)
- Your lifestyle (if you go skydiving on your weekends, for example, you’ll probably pay more than someone who doesn’t)
- The length of your excess period (with shorter excess periods costing more and longer ones costing less)
If you want an accurate estimate for what an income protection policy tailored to you might cost, it’s worth contacting a broker directly. You can give Best Insurance a call on 0330 330 9465 to get a quote today!
Comparisons
| Unemployment Protection Insurance | Income Protection Insurance | Accident & Sickness Insurance | Long-Term Accident & Sickness Insurance | |
| Monthly payout (up to 65% of income) | Yes | Yes | Yes | Yes |
| Maximum payout duration | 12 months | 12 months | 12 months | 24 months |
| Covers accidents | No | Yes | yes | Yes |
| Covers sicknesses | No | Yes | yes | Yes |
| Covers unemployment or redundancy | Yes | Yes | No | No |
| Waiting period options | 60/90 | 60/90 | 30/60 | N/A |
| Excess period options | 30/60 | 30/60 | 30/60 | N/A |
| Initial Exclusion | 90/120/150 | 90/120/150 | N/A | N/A |
Eligibility Criteria for Income Protection Insurance
Permanently reside within the UK
Are aged between 18-64
Have been in continuous permanent employment for the last six months with the same employer for more than 16 hours a week
Are not self-employed, a contract worker, or an agency worker
Are not subject to any disciplinary action or ongoing enquiry by your employer
Frequently Asked Questions
Your income protection insurance policy covers your income if you’re too sick or injured to work or if you’ve been made involuntarily unemployed. You agree on an amount you’d like to be paid if this happens — called a ‘benefit’ or ‘benefit amount’ — and if you find yourself unable to work, you make a claim. Your benefit will cover whatever you need it to cover, whether that’s your mortgage payments, your rent, your bills, or even your groceries.
If you successfully make a claim on your income protection insurance policy, you’ll be paid out the benefit amount you selected when you first purchased cover. This will usually be up to either 65% of your income or £2,500.
Yes, income protection insurance is worth the investment, even if you are in the UK. With an income protection insurance policy in your back pocket, you won’t have to rely on your savings, state benefits like Universal Credit (which often aren’t enough to live off of for long), or handouts from loved ones to keep your head above water in the event that you couldn’t work. Think of it like paying into your rainy-day fund; one day, you’ll need it.
Can I get unemployment protection insurance if I’m self-employed?
Self-employed individuals can get unemployment protection insurance, but it’s more challenging than for traditional employees. Policies are tailored and usually require proof of income, such as tax returns or bank statements, to set the benefit amount. Illness and injury are more commonly covered, while unemployment coverage has stricter limitations.
How long will unemployment protection insurance pay out for?
The typical benefit period for unemployment protection insurance is up to 12 months, though many claims last less. Payouts depend on how quickly you find a suitable job based on your skills and financial needs. Your policy will continue paying until the 12-month limit, after which you’ll need to return to work or rely on savings.
What are the most common exclusions in unemployment protection insurance policies?
Common exclusions in unemployment protection insurance policies generally include voluntary resignation, fair dismissal (for example, if you were made unemployed because of your conduct), pre-existing conditions (i.e. if you already knew you were going to lose your job when you purchased the policy), and unemployment during the IEP. For a more specific list of policy exclusions, please check your policy wording.
Is unemployment protection insurance tax-deductible in the UK?
According to UK tax laws, any benefit you receive from your unemployment protection insurance is tax-exempt. That means that you won’t have to pay any tax on your benefit once you’ve received it, so you’ll get the full amount you’re expecting. Unfortunately, though, your premiums aren’t tax-deductible.
Can I cancel my unemployment protection insurance policy anytime?
You can cancel your unemployment protection insurance policy whenever you like! All you have to do is contact your insurer, whose details you’ll be able to find in your policy wording. If you’ve only had cover for 30 days or less and haven’t made a claim/don’t intend to make a claim, you’ll get your premiums refunded in full. If you’ve been insured for longer than 30 days, though, or you intend to make a claim, you won’t get a refund in your premiums.
Will my unemployment protection insurance policy cover me if I lose my job through redundancy?
Yes, you will be covered if you lose your job through redundancy — in fact, situations like this are exactly what unemployment protection insurance has been designed to cover. If you’re made redundant, you’ll have to claim through your unemployment protection insurance policy like you would for any other situation.
How soon after losing my job can I start claiming unemployment protection insurance?
How quickly you’ll be able to get paid will depend on how long of an excess period you’ve selected, as well as how quickly you’ve made your insurer aware of your job loss. Most claims will be processed in about 30 days, but your excess period can be as long as 90 days, depending on what you selected when you purchased your unemployment protection insurance policy. You’ll have to wait for your excess period to finish before you’ll receive any benefit payments.
Can unemployment protection insurance cover part-time or temporary workers?
Unemployment protection insurance may cover part-time or temporary workers, but this depends on the insurer and policy. These jobs are seen as higher risk, so coverage is rarer and has more restrictions. Some insurers offer coverage for part-timers working over 16 hours a week, while temporary workers may face more limitations but can still find coverage with certain insurers.
Can I get long-term unemployment protection insurance?
Unfortunately, most insurers don’t offer long-term unemployment protection insurance, because unemployment without cause (e.g. medical issues) should only ever be a temporary thing. If you’re interested in long-term cover, it might be worth checking out long-term accident & sickness insurance, which will pay out in the long-term if you’re taken out of work by an illness or injury.
Will pre-existing conditions be covered by my unemployment protection insurance?
No, pre-existing conditions are never covered by unemployment protection insurance. In this context, ‘pre-existing conditions’ refers to knowledge that you were going to lose your job at the time of purchase, which no insurer will cover.
What’s the difference between income protection insurance, redundancy protection insurance, and critical illness insurance?
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