redundancy protection for mortgage

[givemeaclue]

moving house so bigger mortgage. would like to take out some kind of redundancy protection - is it better to take out general redundancy insurance i.e you get a certain amount every month, or is it better to take out redundancy protection that is linked to the mortgage?

any advice?

I would have a chat with an IFA if I were you. There are a couple of options available. Income Protection, Mortgage Payment Protection. The first one covers you I believe up to 75% of your monthly income tax free for a set period of time, normally 12 mths. The second is a similar idea, but only covers your mortgage payments.

What general area are you in? I may be able to recommend a decent one.

^^Should say I do not work for any IFA

One thing to check - whatever sort of policy you decide on after consulting IFA - is the precise terms under which it pays out. If it is redundancy and signing on for JSA (fairly standard), be aware that if you are unlucky enough to be made redundant during pregnancy or maternity leave, you may not be eligible for JSA and this can mean the policy won't pay out. This may not be an issue for you personally, and it might not be a widespread condition - I heard about it from reading someone's story in a newspaper, and they may have been making to most of a really rare set of circumstances. But it might be better to know exactly when the policies you consider will (and won't) pay up.

from what I know, redundancy protection is not worth paying for.

If you are made redundant you will get redundancy pay which should see you through for a little while (is tax free up to a certain amount) plus you'll be paid your notice period on top of that. Weigh up the likelihood of being without a job for more than a couple of months. instead of paying extra for redundancy protection you are better of (imho) putting that money into saving to help cushion you if you should be made redundant.

I looked into this a while back.

The problem is that in the current climate, a lot of insurer's have pulled out of the market and those who remain have jacked up their rates. It's a lot of money for not a lot of protection.

As LadyDeedy said, you are probably better putting that money you'd be paying into a separate account and self-insuring.

Certainly worth looking at. I believe that rates are due to rise across the industry in October (not that it's a cartel or anything like that!)

When you get made redundant you don't always get a tax free lump sum and wages for the following x weeks. I have been made redundant 5 times in 5 years. Most companies I worked for I got paid in leui of notice and a very small exgratia payment. The last time I got made redundant the company went into liquidation and I hate to fight with creditors to get the pay that I was owed. So personally I would say having some cover is worth it.

I have no opinion on the policies as such, but would say that as an employment lawyer a lot of the packages my clients give are not redundancy and there is often an argument about how to phrase the payments as I cannot allow clients to describe a pyament in such a way as to defraud the insurance company, which often means that because of the very precise terms of the policies they do not pay out if you lose your job for a lot of reasons which may not in fact be your fault.