5 top consumer tips on Unemployment Cover

Unemployment Cover has become increasingly popular in these uncertain economic times for people who want to protect themselves against redundancy. However, it is not a product that many people are familiar with, which is why ASDA Life has come up with a quick guide for consumers to help them understand what to look out for when buying this type of policy.

1. DON'T BUY WITH PPI

It is important, particularly in the current economic climate when people are worried about job security, that consumers are not led into believing that they have to buy PPI to get Unemployment Cover. Unemployment Cover can be bought stand alone or as an addition to a policy like Income Protection

2. QUALIFYING PERIOD

This is the period of time between the policy starting and the earliest point the holder is allowed to start claiming. If the client finds out they will be made redundant in this period they cannot claim. Consumers want this to be as short as possible so that they have as much opportunity as possible to claim.

3. DON'T WAIT

Once consumers have specific knowledge that they are going to be made redundant they cannot take out a policy. Also, if it is left too late to take out a policy and they are made redundant before the qualifying period, they would not get paid. So anyone who is concerned should make enquiries as soon as possible.

4. DEFERRED PERIOD

This is the period between when a person starts claiming and the time they start being paid. Some policies will backdate this. The shorter the deferment period the more expensive the policy, but the quicker policyholders can get paid.

5. MAXIMUM BENEFIT

Don't take out more than the maximum that is allowed. If a policyholder asks for more the premiums will be higher, but they will not receive any money above the policy's maximum benefits, so consumers should make sure they know what's allowed.

Matt Morris, Senior Policy Adviser at ASDA Life, says: "There is more interest in Unemployment Cover at the moment than there has been in a long time and we are receiving more enquiries about this product than ever before. It seems a simple product in that it pays out if you are made involuntarily redundant, but there are several areas, other than price, that consumers need to consider before buying. People should always double check the small print before buying."