Redundancy Insurance

Someone was recently telling me they had taken this out

Income Protection does not include redundancy cover. Nor will you be covered if you are fired or if for some reason you have to leave work voluntarily

I see some policies i.e. NRMA have

Involuntary Unemployment Cover*
- Receive up to three months of payments while you look for work, if:
You?re made redundant from a full-time job, or you?re self-employed and your business becomes insolvent.
You?ve had Involuntary Unemployment Cover for at least six months
 
You are much better off putting the premiums and creating your own insurance.

These policies are quite expensive for 3 mths.

Also how much leave will you have and how many years service with an employer also counts. But if you get fired its another story..

Someone was recently telling me they had taken this out



I see some policies i.e. NRMA have
 
Income protection insurance must be costed based upon a range of factors incl age, health issues, etc. Policy wording can be highly restrictive by using specific terms such as own occupation / any occupation. Premiums also affected by waiting period, level of cover (up to the legal limit!!), term of policy (3mths, 6mths, 12mths, age 65). Some end when a claim is made and others allow multiple claims. I have even seen self employed people consider such policies and been denied a claim. (ie not employed !)

I have a tax client who had IP policy and was diagnosed with MS. Her policy was to age 65 so she had income for 8 years.

Income policies can have add ons such as redundancy, trauma etc

Such policies can be of limited value in a super fund and premiums are deductible. Often such group policies are cheap but with some terms that restrict value. Access to super income policies can be a difficulty for younger workers unless disabled by the incident.

Personal financial advice is a must. Those aweful policies flogged on TV are really aweful and are often 3 month policies with a $5K limit a month etc.
 
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