The BIG R ! Redundant

Have you lost your job?

Redundancy insurance, also known as unemployment insurance, is available as a stand-alone policy or as part of an optional benefit to mortgage insurance policies. It replaces a portion of the income you would have earned if you were working, providing you with funds to help pay the rent or mortgage.

Redundancy Stand-Alone Policy

As a stand-alone policy, redundancy protection provides monthly payments to help pay for financial obligations if you lose your job through no fault of your own. Redundancy insurance is not available to anyone who works at a seasonal business or project, or who has not been employed full time over the last 12 months.

A stand-alone policy can be designed to meet your individual financial situation. The policy premium is based on the benefits level selected. For example, the higher the monthly payment option you select, the higher your premium for the coverage.

Redundancy Life Insurance

Some life insurance companies in New Zealand offer redundancy coverage as part of its stop-gap insurance. While it does not replace your full income, stop-gap coverage pays a monthly benefit for a set amount of time, for example 120 days, to augment your savings. It also provides monthly benefits if you are forced to declare bankruptcy. However, certain stop-gap policies have age limitations and they may not pay benefits if unemployment occurs within the first 180 days of the policy being issued.

Redundancy Income Insurance

Coverage for unemployment is sometimes available as an optional benefit under mortgage insurance protection. Mortgage insurance protection provides payouts to replace your income when you become sick or injured and are unable to work. By adding redunancy coverage, you will receive benefits if you are laid off from your current job. The benefits continue until you find new employment based on the coverage guidelines of the policy, which for redundancy is a 26 week stand down period from the time the policy is issued.

Redundancy Mortgage Repayment Insurance

Most mortgage protection insurance policies offer unemployment insurance as an optional coverage for an additional premium. A mortgage is required to purchase this optional coverage. In addition, the optional redundancy coverage is only available if you selected mortgage repayment insurance with your mortgage repayment coverage and you were a salary and wage earner at the time the policy went into effect. The redundancy optional benefit provides benefits after a waiting period and typically is available for up to six months.

Feb 2013 NB: recent changes to some insurance companies now allow you to use your gross rental in the same way you have a mortgage.

Why Redundancy Insurance Is Important

No one plans to lose their job. It could be from a slowdown in work, a company going out of business, the elimination of your position, or a company relocation. Often times, we’re not even aware that a job loss is about to occur. With this type of uncertaintly surrounding your employment, it makes sense to have a plan in place to provide financial relief to you and your family if you lose your job.

Redundancy insurance can make certain that the monthly mortgage payments or rent are made and that you are able to provide the life’s essentials to you and your dependents who rely on your care. It’s stressful enough losing a job, redundancy insurance removes the stress of figuring out how to make ends meet financially.

Be Proactive, Your Livelihood Depends on It

It’s important to get redundancy insurance now while you are working because once you lose your job, you no longer qualify for the coverage. If you need help in deciding which type of redundancy insurance to purchase, can help you make sense of it all. We help ensure that you remain financially stable as you look for new employment opportunities. Talk with John McCarthy at Income Protection Insurance NZ  Please Note: The stand down period for redundancy insurance is 6 months.


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