2.2.8 Redundancy Cover
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The purpose of the cover is to replace some of the earnings lost
through redundancy, so will not be open to a claim where the job
is lost because of other reasons for dismissal.
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Generally, the policy will have to be in force for a minimum period
before a claim is allowed, and there will be a deferred period after
the claim before monthly benefit is paid.
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Benefit will have either a cash limit, or may be claimed to pay
only certain expenditure such as mortgage and related payments.
Benefits payable may also have a mortgage amount ceiling.
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Benefit payment period will generally be limited to between 6 and
24 months, perhaps with an upper age limit.
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Most policies are only available via mortgage lenders and occasionally
linked to some universal whole of life policies, but being a high
risk area of insurance given recent and current economic conditions,
the choice is limited and premium rates are quite high.
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