What is it?
This type of insurance protects you financially if you were no longer needed for your skills at work. Most insurers that offer this will only provide cover for a short time (up to 6 months). This should provide you with enough support while looking for your next job. Note that most insurance companies will put a limit in place for how much they will payout monthly.
Do I need it?
Before purchasing, make sure you are eligible to make claims based on your job and industry as there are some criteria you need to meet before receiving the payout. One example is that you must be a full-time employee, not self-employed or working as a contractor. Take extra care when it comes to this type of insurance since you wouldn't want to pay for something when you can't actually receive any benefits. Self-insurance also known as emergency fund is possible where you set aside between 3-6 months of your salary and if you lose your job, you still have enough to support yourself as you search for work.
How do I get it?
First, this type of insurance cannot be purchased by itself and usually comes as an add-on to Income Protection or Mortgage Repayment provided by companies such as Cigna, Partners Life and AIA.
Second, you can get a quote online or with an adviser to understand how much cover you need. This is quick and easy, so check multiple providers and find out which policy suits you the best.
Third, as this type of insurance is usually an add-on to Income Protection or Mortgage Repayment, you need to complete an application form with documents such as proof of income for Income Protection Insurance, or mortgage loan documents for Mortgage Repayment Insurance.
Fourth, check that your insurance cover is still right for you every 12 months or if you have any changes to your income or job.
Quashed is an online platform that makes it easy for you to manage and track all your insurance in one place. You’ll be prompted at the right time to check on your insurance and it helps you keep track of how your premiums are increasing each year.
What factors into the price of my premium?
The cost of your premium is different with each provider and they don't all follow the same guidelines when it comes to calculating costs. Premiums are the on-going payments you make to continue your cover and protection. Below are some of the common factors used in the industry that will play a part in determining your premium.
Your policy’s waiting period: Many insurers will offer the ability for you to choose the waiting period for receiving the payout out of several options. A shorter waiting period will mean additional cost added to your premium.
Your occupation: Insurers are always considering risk associated with different jobs based on current trends and their historical data. As such, each provider will have different costs as your premium will change based on the risk of you not needed for your skills at work.
Your specific plan and cover: Your Redundancy Insurance is bundled with another insurance, and the overall comprehensiveness of the policy in terms of add-ons and percentage income coverage will determine how expensive your premium is. The more you get out, the more you have to put in.
