Unemployment insurance is a financial product which protects you and your family by covering your living expenses, such as a mortgage, bills and loans, if you lose your job and are out of work for a period of time. The policy holder will generally make monthly payments to the insurance provider, on the guarantee that they will pay out in the event of redundancy.
When looking for unemployment insurance, the main hurdle is working out who you can trust to give you good, impartial advice on the type of policy you need, and what you should expect to pay. For most consumers, the first point of call will be price comparison sites. These sites can be good to use for quick research and to get a broad idea of the market, but it is important to remember that they do have their limitations.
Price comparison sites make money through commissions, earned when they direct a consumer towards an insurer’s listing and it leads to a sale. Consequently, the only sellers listed will be those who agree to pay the commission to the comparison website, which means that consumers will potentially get a skewed picture of the market when they run a comparison. Some of the biggest insurers in the UK have chosen to stay off these sites, preferring to deal with customers purely through their own channels.
For a genuinely comprehensive comparison of insurance policies, you can use the Money Advice Service set up by the Government’s financial regulatory body, the FSA. This site gets its funding from a levy on the financial sector rather than from commission, meaning that all providers are registered on the site.
While the Money Advice Service is completely comprehensive and absolutely reliable, the negative side is that its size makes it difficult to navigate and find what you want. It requires some time and effort to take advantage of, but it can be worth it to get the best possible deal.
Another good tip if you’re looking for unemployment insurance is to first get an exact idea of the policy you need. There are lots of different types of income protection, and they go under several different confusing names. Essentially, there are two categories for policies – those which are designed to cover your mortgage and household bills if you are out of work, and those which can cover other expenses, such as loans and rent payments.
There has recently been controversy because of people being sold insurance they didn’t need, which has been widely reported in the media and has led the public to be a bit more careful and sceptical. It makes sense to look carefully at your situation before you commit to a policy that might turn out to be an unnecessary expense for you. For example, high earners may not require this kind of insurance, as they often have sufficient savings to cover them if they are out of work for some time.
Overall, the best advice for anyone looking for unemployment cover is to take your time assessing both your own needs and what the market has to offer before signing up to anything. That way, you maximise your chances of getting the very best possible policy at the best possible price.
iProtect is a leading provider of unemployment insurance in the UK. Visit the iProtect website to find out more and get an income protection quote.
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