Private Insurance to Top Up Inadequate UK Unemployment Benefits

At a time when our cash strapped Government are urging people to stand on their own two feet and not to rely on the State to provide, those who can, are considering their options. The greatest concern for people in both the public and private sector is unemployment and how to cope financially if are out of work. For those with only limited savings to fall back on, because of the pitifully low level of state benefits, a private provision to top these up has become a priority. The UK insurance industry has responded with several products people can buy directly on-line to meet this need.

Unemployment Protection Insurance is designed to enable the customer to continue repaying their debts, such as mortgages, loans and credit cards, if they have to stop working due to accident, sickness or unemployment. The BBC reported on 22 November 2010 that some people are putting their homes at risk 'due to 600 debts.' This is both frightening and so easily avoided by anyone who has the foresight to grab themselves an Unemployment Insurance policy when it is available to them.

But there is a problem. Many people only think about buying an insurance policy to cover their debts and other living expenses when it is too late. This is because, when taking out the policy, they must be able to truthfully state that they did not expect to be unable to work. Otherwise the Insurance Company would have every right to refuse to pay. So, if a firm or organisation has not made any announcements about laying people off, it is well their employees giving serious thought to this right now.

The better Unemployment Protection Insurance policies will offer a route for the customer to purchase the type of cover that is best value for them. In this regard, it is worth noting, that covering mortgage repayments and a small amount of household expenses each month is usually much cheaper than asking for, say, 1000 monthly benefit that is not linked to any particular repayments. The later is the province of short term Income Protection Insurance, good, but rarely the cheapest to buy.

How much cover?

Anyone thinking about Unemployment Insurance should consider how they would cope if their income stopped or was reduced due to accident, sickness or unemployment. They must look at their own financial circumstances, including any other insurance cover or savings they already have. The great majority of people taking out this cover know they could cope if they were out of work for a month or two*. However, if this stretched out to six or eight months, they would be in deep trouble.

Savings can meet every day expenses such as food and fuel for quite a while, provided the weight of large monthly bills (typically mortgage repayments, rent or loans) can be shouldered by an Unemployment Protection Insurance policy. Therefore this is usually the money saving approach that most people take when selecting their benefits, they buy a policy that will pay their important bills until they are back at work.

Who can apply?

These policies are offered to anyone over 18 and under 65 who live and work in the UK. Usually this cover can also be bought by people who are part time (working at least 16 hours a week) as well as the self-employed or individuals on fixed-term contracts,

What is covered?

This insurance pays the policyholder the sum they choose each month as a monthly benefit for up to a year or until they go back to work. It is possible to buy a policy that pays out for up to 2 years, however as the average spell of unemployment at this time is up to about 8 months*, most opt for a cheaper 12 month policy. It is possible to claim more than once a year on this type of insurance.

What is not paid?

Unemployment Insurance will not cover any medical conditions the person knew about at the start

of their policy. The insurers also exclude pregnancy or any absence due to self harm. In respect of unemployment, these policies will not pay out if the policyholder resigns or accepts voluntary redundancy. Equally, no payment will be made if the person loses their job due to doing something that breaks the conditions of their employment contract (e.g. misconduct or theft).

For unemployment benefits to be paid, most insurers impose a deferment period. This usually means that the policy has to be in force 90 or 120 days (providers vary) before the policyholder can claim.

Easy to cancel

Premiums are usually collected monthly by direct debit and if the policyholder decides they don't need the cover any more, they can simply cancel their direct debit. This will end the policy immediately and without penalty.

Buying

In a world where future employment prospects are uncertain, for anyone who does not have enough saved to meet their bills for six months to a year out of work, this cover is certainly worth serious consideration. For the lowest prices look for the specialist providers on-line.

To avoid the hard sell from tele-sales brokers, it is wise to only get quotes from companies who will give an indicative price before the applicant has to complete their telephone number. There are some that purport to be comparison web sites to induce the customer to complete their contact details. These are then immediately sold on to a company with commission driven sales agents who don't take no for an answer!

Price

Dennis Haggerty from specialist i:protect insurance commented, "Expect to pay 20 to 40 per month for a policy that pays out 1000 per month if you are unable to work. It is important to note, unlike car insurance, Unemployment Insurance costs progressively more as you get older. This has come about because it is proving much harder for the over 50's to find work and health issues become worse with age, both have pushed up prices"

Unemployment Insurance may not suit everyone. However it is a good value option for young families and individuals who would rapidly find themselves in serious debt if they were out of work for any length of time. The key is not to delay applying for this insurance until an employer raises redundancy concerns. By then it will be too late for employees to cover themselves in respect of any job losses that may occur.

*Industry data from Financial Services Forum Oct 2010.

Dennis Haggerty FCII M IDM Marketing Manager iprotectinsurance.co.uk specialises in the supply of low cost on line Unemployment Insurance, Lifestyle Protection, Income Protection and Mortgage Payment Protection Insurance.

The key to the success of i:protectinsurance has been the focus upon supplying a product range that is exceptional value for money because it is available exclusively on-line. This eliminates the usual costs associated with selling insurance: telesales teams, direct mail, middlemen and commission.

The i:protectinsurance product range includes Unemployment Insurance Income Protection / Lifestyle Protection, Mortgage Payment Protection, Gadget Insurance and Mobile Phone Insurance called Phone PLUS

Ten things I wish I knew before unemployment insurance buy

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We have all done it, thought about buying something and have not really had the time to research it properly. So we say to ourselves,' it looks ok and as I don't really have the time right now, I'll just buy it, I expect they are all about the same.' The skim researcher will do a little more. They are likely to pick a known brand, look for a best buy recommendation and go for something fairly mainstream. Then for added comfort say "If lots of other people have bought this one it must be alright."

For buying a washing machine or a TV, this will probably work out to be good enough. Price and appearance of a physical object are easy to assess. However, when it comes to buying a service or an insurance product it is a very different matter. Service is all about the reputation of the company for how they deliver that service. Take airport parking for example, hundreds of people go through the same process every day and customer feedback is readily available. So you know what you are buying and what to expect.

With Insurance you are buying a promise. You are lucky to get more than a few pieces of paper and a leaflet in exchange for a significant sum of money disappearing from your bank account each month. Worse still, from a customer feedback viewpoint, it is notoriously difficult to get any realistic idea of what their customers think. This is mainly because the majority of people with insurance policies simply don't want the service the insurance company offer, as this will mean some disaster has befallen them. To think the happiest customers are those who have paid for the product and have received nothing in return! At least nothing except the peace of mind that should something go wrong they will not be faced with anything from a large bill to financial ruin.

The majority of us need to work to earn enough money to support our family and to pay the bills. Most people scale their lifestyle to their earnings and should their wages stop coming in every month, they are very soon in serious financial trouble. This is mainly because, particularly for people starting out in life, first time buyers and those with young families, there is very little opportunity for saving. Regular outgoings take virtually everything and having thousands of pounds sitting in a bank account is simply beyond most people.

For anyone with little or no savings and worried about how they could cope if they were made redundant, Unemployment Insurance can offer an alternative. It is much easier to pay ?30 to ?40 a month to an insurance company than it is to save up, say, ?12,000 to meet financial commitments for up to a year. When I thought it would be sensible to insure myself against the risk of unemployment, I wanted enough cover to at least pay the bills so I would avoid credit blacklisting whilst looking around for another job. At the time it became more urgent to get cover as friends who had been made redundant remained out of work for well over 6 months. So I made the classic mistake of rushing to buy a product that was not quite what I needed and at the wrong price.

Learn from my experience. Here are my ten tips to choose the right cover at the best price.

1. Know what the product is called. This may seem pretty basic however most providers do not name their products Unemployment Insurance. Nor do virtually any of them call it Redundancy Cover, even though this is what most people want to buy. Look for 'Accident, Sickness and Unemployment Insurance', 'Income Protection' (short term) or 'Lifestyle Protection Insurance'. Just to confuse matters, full term Income Protection Insurance does not cover unemployment, it is for long term disablement until retirement. Don't spend time researching the wrong thing.

2. If you are mainly looking to cover your mortgage repayments and perhaps up to 25% more for other household bills, you will find better deals by examining Mortgage Payment Protection Insurance (MPPI). This is widely available and therefore the most competitively priced. If you need higher benefits, or are paying rent rather than a mortgage, look for a virtually identical short term Income Protection or Lifestyle Protection policy.

3. Do lots of on-line research, don't worry about the detail at first, just get an idea what premiums are charged for a given level of cover. The comparison web sites are particularly useful as they compare 'apples with apples'. Money Supermarket looks to have the largest number of low cost direct to public providers. See their insurance section for the 'Mortgage' and 'Payment' options.

4. Stick with the big brand comparison web sites. You will discover many other so called on-line comparison websites that are nothing of the sort. They are set up just to get hold of your contact details and sell them on to the highest bidder. So beware of any that want your telephone number before giving you at least an indicative quote, your phone could be ringing off the hook within minutes. I found these people to be very persistent and, personally, as I dislike the hard sell, I think they are best avoided.

5. Look for specialist providers. They have the best reputation for offering good value. The problem is that many you will not have heard of. That is why it is useful to check out the comparison websites that will help immensely to narrow down the search. However, not all suppliers are on them. Money Saving Expert recommendations for Mortgage Payment Protection Insurance are another useful route to finding the best value providers.

6. The lowest premiums are generally offered by providers who are far more selective in terms of the people they will cover. However, if you do meet their criteria the premium charged can easily be less than half or even just a third of what you might be charged elsewhere! Also, please bear in mind that unlike motor insurance, the older you are, the more expensive this cover becomes.

7. If you have been made redundant in the last year (even if you got another job straight away), have been in a job for less than 6 months, or your company is already making cut backs, most providers will not cover you. Only the most expensive might be prepared to offer you insurance, however some of their terms and conditions may further restrict their cover. Some of the lowest premiums are only available to people not deemed to be in 'at risk' industry sectors. For example, builders and civil servants will struggle to find a good deal at present.

8. Most do not offer instant cover, even if you apply on line and fill in a direct debit there and then. Many will only accept your application initially and will then confirm if they will offer cover after making checks. Usually these checks focus upon your employer with special reference to any planned lay offs. For applicants with medical problems they may ask for a doctor's report where cover includes accident and sickness

9. You can also buy this type of insurance via an IFA or your local mortgage broker. However they usually cannot offer a choice of provider and as they give advice and handle the paperwork for you, the premium will be substantially higher. Nevertheless, if you hit problems applying on line or your application is rejected by web providers, brokers do represent a useful alternative. Unfortunately once you get in front of any intermediary be prepared for a comprehensive selling job, they have a raft of other insurances they would love to sell you. So be very specific, or they could keep you there for hours!

10. In respect of unemployment benefits, though the policy starts, all insurers have what is called an initial exclusion period. Typically this is for the first 120 days of the policy. It does vary from 90 to 180 days and is something you must bear in mind when comparing cover. This means they will not pay for any claim for unemployment that arises or that is announced during this period. This does sound mean. It is possible for the innocent person to be caught out by a sudden change of fortune for their employer. For the underwriter it is an anti fraud measure to put off people taking out the cover just before an official announcement is made about redundancies at their firm.

Following my research into buying this product I found I could be charged more than three times more for the same cover bought via a well known High Street bank, compared to an on-line specialist. Since that time I have got a job working for a company that sells this product, you could say my research really did pay off. The recession has meant the number of people claiming on these policies has rocketed. The average benefit level they have chosen is ?1000 per month which pays the bills. The cover includes free access to a specialist re-employment company that helps policyholders get another job by assisting with their CV, job search, interview techniques etc.

I am convinced the cover is well worth buying and have seen a huge number of unsolicited thank you letters confirming this from people who have claimed. Personally, for anyone with less than ?10,000 in the bank this insurance is a great alternative to the dire financial consequences of being out of work for any length of time.

Dennis Haggerty FCII M IDM Marketing Manager iprotectinsurance.co.uk specialises in the supply of low cost on line Lifestyle Protection, Income Protection and Mortgage Payment Protection Insurance.

Key to the success of i:protectinsurance has been the focus upon supplying a product range that is available exclusively on-line. By eliminating the usual costs associated with selling insurance: telesales teams, direct mail, middlemen and commission, i:protect can offer customers exceptional value for money.

The i:protectinsurance product range includes Income Protection / Lifestyle Protection, Mortgage Payment Protection, Gadget Insurance and Mobile Phone Insurance called Phone PLUS

Income Protection Insurance and Mortgage Payment Protection Insurance

Not just the poor, the unemployed person going without health insurance

SACRAMENTO — so that more Americans lose health coverage because of unemployment, the latest snapshot of the uninsured reveals a grim picture: it is not only the poor and unemployed people now go without health insurance.

The percentage of uninsured among families earning between $ 50,000 and $ 75,000 per year has almost doubled in the last decade.

' It is precisely the trend, which has a driving force in the conversation around health care reform, "said Anthony Wright, Executive Director for Health Access California, a consumer health advocacy group.

"As it has been a real crisis in the middle class, it required a larger correction--which is why the big push for a federal health law," Wright said.

Even as the country begins rolling out President Barack Obama Patient protection and affordable Care Act, which was signed into law in March, continue to the number of Americans without medical insurance grow--to an estimated 50 million nationwide.

Robbin Gaines, a senior program officer with the California health care Foundation, said she could not fully explain the increase in the insured, but said unemployment is specific reason.

"As people lose their jobs, they also lose their health insurance," she said.

Fifty-two percent of Californians working people and their families now have health insurance from work-based coverage--from 65 percent in 1987, according to the Foundation.

As a consequence, the more people buy health coverage on their own, that small businesses do away with the advantage.

Often, but they cannot afford the same coverage you had once through work, and many choose policies with higher premiums and deductibles.

The cost of prescription drugs and medical services also continues to rise, to add to the financial burden on families, said Patrick Johnston, President of the California Association of Health plans.

"The Rising cost of health care will inevitably put pressure on more people and let them uninsured, unless we can lower health care costs and to assist these families which is not really can pay for coverage with a grant," said Johnston.

The increase in the number of uninsured can go unabated for another couple of years, until the key provisions in the health legislation are implemented.

The good news, said Wright, is that help is on its way.

"The bad news is the key provisions are not kick until 2014,? he said.

It is when many key features of the federal health law go into effect, including the opening of the health insurance exchanges, where millions of Americans who are struggling with the costs of health care will be able to take advantage of the Government subsidies if they qualify to purchase coverage.

It is also, when most Americans will be required to obtain coverage through their employers--or through exchanges--or face tax penalties that will eventually exceed $ 695 per year for a person or more than $ 2,085 per year per family.

The Federal law, the subject of months of intense debate in Congress and public forums across the country, was meant to increase access to health care to the country's millions of uninsured.

In the years kept the percentage of lower-income families without health insurance is generally constant--with approximately 37 percent of those earning $ 25,000 a year or less ongoing without health coverage.

From 2000, about a quarter of families earning between $ 25,000 and $ 50,000, no health care coverage. And around one-tenth of those who earned more than $ 75,000 a year not enrolled in a health plan.

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