Redundancy Insurance: Escaping The Tough Times
With various countries of the world facing sudden economic catastrophes
, a lot of people losing their jobs unexpectedly as an effect of the depressions have become common. This is not only witnessed in the developing nations but has become quite common in the scenario of the developed nations too. Even organizations with high profiles will sometimes have to hand walking papers too their employees to cut down on their expenses. During such hard times, the life of those people who have acquired loans on their houses or who have rented out a house becomes devastated. On such circumstances, the Redundancy insurance comes as a deliverer to the common people.
Redundancy insurance is also called as the unemployment insurance or the redundancy cover. The policy ensures regular financial aid in the misfortune of loss of income to the person who has purchased the policy due to unemployment or inability to work resulting from an injury due to accident or due to sickness. The insurance company ensures that the beneficiary meet his financials responsibilities until he is recovered from the impact of the misfortune. Generally the period of the benefits received differs based on the firm where the insurance is purchased. In most cases the beneficial period is of 12 months but certain firms offer it for 24 months, although those policies may be priced excessively.
The Redundancy Insurance is of different types and the most common types include the mortgage payment protection insurance, income protection insurance and the rental protection insurance.
The Mortgage Protection Insurance is devised so as to secure the property on mortgage in the case of the misfortune. As per the plan, the insurance company takes care of your monthly mortgage repayments to your loan lender. Sometimes, the policy is sold by the bank or the financial corporation while receiving the loans. But in this case the interest rates may be higher. This is a very valuable accessory for a person who has availed mortgage loans in uncertain economic times.
The Income Protection Insurance covers the day-to-day expenses of the policy holder. The premiums paid by this policy holder tend to be higher than those paid for a mortgage payment protection policy as the returns are higher than availed by the latter. In most cases the policy can receive upto half of his income which is tax free.
Similar to the other policies, the Rental Payment Insurance policy covers the rent as well as the dues on the credit card for the policy holder if he faces loss of income for a short period of spam.
Though these policies are too good that anyone would wish to avail, there are certain criteria which an applicant should satisfy to get the grant by the insurance firm. The person who wishes to avail the payments should have lost the job not because of his own fault and should have maintained good record of payments of the premium. The policy holder who wishes to leverage to plan should be actively seeking job which would be verified by the firm from which the policy was bought.
by: Kirthy Shetty
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