Protection from unemployment fears

 Protection from unemployment fears

  No savings and fear of repetition? Many are in this situation and are forced to think about what they would do if they lost their jobs. State benefits are minimal. The Jobseeker Allowance is £ 64.30 per week (£ 50.95 for those under 25). The standard statutory sickness wage is just £ 79.15 per week, paid for a maximum of 28 weeks, and Work and Support benefits start at just £ 68.95 a week.

Compare this to:

   ®The average monthly family grocery bill is £ 428 (Retail Food Consortium June 2010)

  ® Council tax is £ 120 a month for the middle class D home (Telegraph March 2010)

  ® Average annual combined gas and electricity bill is £ 1,000 (money saver)

  The Center for Economics and Business Research (CEBR) was reported in March 2010 calculating that the average British household income is £ 552 per week. The base cost of living figure was £ 403 per week leaving nothing for estimated spending.

When people lose their jobs, they simply cannot stop the level of payments and expenses associated with their current working lifestyle. While everyone has different outbound bills and expenses, the summary of this research indicates that the average household will likely need £ 1,500 to £ 2,000 a month to meet their current obligations and avoid spiraling debt.

Repetition, even with a warning in some months, can be annoying enough. Most people also find they endure an emotional rollercoaster. It is the worst possible time to make decisions about how to cope financially, as the other job can take anything from a week to a year. Therefore, no one knows how much money they will need until another salary actually starts. According to the Office for National Statistics (August 2010) of a total of 2.46 million people registered as unemployed and looking for work, 48% were unemployed less than 6 months old. The unemployment rate between 6 and 12 months reached 19.6%. But the worrying thing is that 32.3 percent have been unemployed for a year or more.

For a single worker who has been unemployed for six months, they would only need between £ 9,000 and £ 15,000 to pay their regular bills. In addition, the potential for long-term unemployment and rising debt becomes an increasing possibility.

What can be done to avoid serious debt?

  Usually, after repetition, people will look for the limit. For example, an existing car loan can be a huge problem for someone fired from work. Deciduous reaction is saying sell the car. However, a potential decline in its value means hardly the debt will be repaid. Even worse, for many jobs, the use of a car is essential. There are also family obligations to consider. Collecting children from school, visiting elderly relatives, or attending hospital appointments usually requires a reliable car. Busy people cannot put off their family life while looking for another job. This comes at a cost.

Those with more than £ 10,000 readily available in their bank accounts, if feeling brave, can bet they'll get another job in less than 6 months. Even if the money represented their life's savings, it would spare them a spiral of debt and anxiety. When unemployed, the importance of having the funds needed to meet regular bills cannot be underestimated, as it provides freedom to focus on finding alternative work.

For many, finding the right job is an additional concern. Maintaining self-esteem is crucial. It is equally important to get the right job and not be financially driven to take the first thing that comes. This is another reason to have the funds to refer to, which gives the job seeker time to find a new role with the right salary. Likewise, most people want to avoid jobs that they know are too stressful, or for which they are personally unsuitable. Having to work part-time, because nothing else is available, can create personal unhappiness coupled with a serious decline in living standards.

No savings? There is an alternative

Provided that the company has not made layoffs or announcements of cuts, the people who work for it are eligible to purchase unemployment insurance. Most of them take this as a substitute for having savings in the bank. Insurance policies with benefits of £ 1,000 a month can be purchased online for a premium of around £ 35 a month. The same coverage can cost at least double that of banks and building societies (Source: MPPI Insurance Expert Guide to Money Saving). It is worth shopping for a good deal.

The unemployment insurance proposal is simple. Without savings, or just enough to stay in for a few months, it is much easier for an individual to get insurance for £ 35 a month, rather than trying to save anything like money to pay their bills in a repeat event.

The benefit of unemployment insurance is that it pays, usually for up to a year, if the policyholder is unable to work. Most of these policies cover accidents, illness, and recurrence. Anyone who works more than 16 hours a week can purchase this cover including the self-employed.

Most unemployment insurance policies also provide services of re-employment professionals to help get another job. They help identify job vacancies, complete a recent CV, and prepare candidates for interviews. It can make all the difference in getting expert help, rather than an individual fighting alone. The best providers also include a "Carer Cover," which pays a large sum if the policyholder has to give up work to take care of a relative.

Unemployment insurance is available under two categories:

   The first is Mortgage Payment Protection Insurance which is designed to cover the cost of mortgage payments plus up to 25% more for family bills. This is usually the best value coverage since there is intense competition for this business from mortgage brokers, lenders, and especially low-cost online service providers.

  The second category is short-term income protection or lifestyle protection insurance as it is often called. This lifestyle cover allows people to pay any number of bills, although it is usually limited to a maximum of £ 1,500 to £ 2,000 a month.

How to get good value

  Denise Hagerty commented Marketing Director for Internet Specialist i: Protection. “Our client research shows that people who buy unemployment insurance usually have some savings, but their money will not last if they remain unemployed for more than two or three months. This is a good value because it is enough to pay basic bills while leaving state benefits and savings to cover expenses. Daily. "

Unfortunately, it is difficult to recommend banks and building societies as a place to purchase this insurance. They were criticized by the Competition Commission and fined heavily for not selling this type of product in the past. Lloyds Bank has now withdrawn from the market. By contrast, major insurers like Aviva and LV continue to support this sector which is now under strict regulation, even though their premiums are not the cheapest.

The Money Saving Expert Guide for MPPI is very helpful to consumers and explains where to look for the best deals. Additionally, mortgage insurance on the Money Supermarket website is a good place to compare low-cost providers online. Otherwise, try professional brokers or IFA if previous work or medical history requires individual considerations.

Dennis Haggerty FCII M IDM Marketing Manager iprotectinsurance.co.uk specializes in providing low cost online unemployment insurance, lifestyle protection, income protection and mortgage payment protection insurance.