Involuntary Unemployment Insurance
In this world of uncertainty, building societies and banks are leaning more towards encouraging buyers using their services to take out unemployment insurance to ensure that if they do actually lose their jobs, or become incapacitated and unable to work for whatever reason, then they will still receive their payments. Unemployment insurance is not currently compulsory but mortgage lenders can refuse to lend money if you do not choose to implement a policy. In theory it is a good idea, and even more so when life is so unpredictable and the working environment is unstable. Obtaining unemployment insurance can ease your mind considerably if you do happen to lose employment. There are some terms and conditions generally attached to the policy and it will not run indefinitely so if you think you can just quit your job and your mortgage will be paid through the insurance policy – think again.
Be very sure of the small print within the insurance policy as some deem that the employment loss has to be involuntary and that does not mean bringing about a series of events causing a company to relieve you of your job. Additionally, the insurance policy will have to be in force for a minimum of 6 months, so if you lose your job before you have reached that period – even if it is through no fault of your own – then you will still not receive the benefit of the insurance.
Limitations of unemployment insurance
Unemployment insurance does have its limitations. For example, if you are self employed, you cannot obtain this kind of insurance policy. Additionally, if you only have season or temporary work then you will not be able to take out a policy of this kind. As more workers are being made redundant, it makes sense to at least consider taking out an insurance plan of this type to help protect your mortgage. If you can continue to pay the mortgage despite dire circumstances and with no job, you can at least have a roof over your head and the mortgage company will not be able to force you into the courts to repossess your home.
Unemployment insurance at a glance
If you are made redundant or unemployed and you have not contributed to it through misconduct or voluntary redundancy then an unemployment insurance policy will make the payment that you have chosen. If you have chosen wisely then your premium will cover your mortgage payment. You may even have chosen a policy that pays a higher amount, which means you will have a little extra money to enable you to find more work or meet payments for bills.
The unemployment insurance policy does not generally pay immediately. There is usually a qualifying period of around 90 days, although this can vary from company to company. Also, the policy will generally only pay out for a certain length of time which again will vary and this can be anything between 6 months to 2 years. Do ensure that when you take out this kind of insurance you are aware of these details.
An additional benefit you can add to unemployment insurance is one of sickness benefit. This means that if you are incapacitated for any length of time and unable to work, say due to a prolonged illness or an accident, then a payment will be paid to you which means that you can continue to pay for your mortgage or it can support you with any other costs you need help with. In this way, you can see how unemployment insurance can take a weight off your mind if you think you will be faced with losing your job. It can be a small price to pay but the benefits can be huge.