Redundancy Payment Protection: A Rising Need In Light Of The Times
When used in the context of labor statistics, redundancy refers to the loss of a job due to layoff or involuntary early retirement. Whatever the situation, job losses due to the redundant actions of an employer are often life-altering and financially burdensome; therefore centering new light on the importance of redundancy payment protection plans.
Redundancy payment protection policies are most-often classified into one of two types of payment protection: Mortgage and loan and or income protection plans. Both allow the insured protection against missing monthly payments due to job loss due to redundancy. And as we all realize, missing payments on any type of loan jeopardizes both an individual’s credit files as well as potentially putting their mortgage into dangerous arrears.
Mortgage Payment Protection:
With this type of payment protection, your monthly mortgage payment is insured for repayment to your provider. Since a mortgage payment should always be the first bill you pay each month, this type of redundancy payment protection is crucial.
These plans can be purchased from either the original loan provider or an outside loan vendor. Both instances, of course, require doing your research and searching for the greatest benefit for your money.
Loan or Income Payment Protection:
When taken out as redundancy payment protection, loan or income payment protection plans insure a certain level of income each month that the insured uses to cover outstanding loans and other expenses. In some cases, a mortgage protection plan can be assigned into an income protection policy.
Similar to mortgage protection, these policies are available from a wide variety of vendors with the same set of purchasing guidelines to be followed.
Job Loss & Redundancy: The Current Facts
Recent statistics from The Office for National Statistics reveal the following:
- Toward year-end 2008, the number of unemployed workers in the U.K. rose to an 11-year high of 1.86 million, resulting in an overall unemployment rate of 6 %.
- The number of those claiming the jobseekers allowance rose by over 75,000 in November, 2008 to its highest level since July, 2000; thus indicating the largest increase in jobless claims in the U.K. in nearly 18 years.
- Third quarter economic numbers reflected a 0.5 % decrease in the British economy alone; with 2009 predictions nearing the 2.5 % mark.
These findings, along with previous quarterly reports, indicate the pace at which the British economy is slowing. This economic downturn, however, is not isolated. Its effects are being felt worldwide as recent U.S. statistics reflect a serious downturn in the U.S. economy and resulting rising unemployment.
According to a chief European economist, Jonathan Loynes, "[It’s] clear that, as in the U.S., conditions in the labor market are now deteriorating very quickly, threatening to feed back into yet further weakness in the housing market and economic activity in general."
There’s a common saying stating that the best defense against potential life-changing events is an ounce of prevention. When it comes to a job loss situation, redundancy payment protection plans may offer more than a pound or two of cure.
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