Get Premium Low-Cost Redundancy Insurance In Minutes
Clear-concise guidance and support from our 5-star rated insurance specialists.
Tax free benefit Short-term protection Instant quotes Free adviceGet your perfect deal
Summary
Get Premium Low-Cost Redundancy Insurance in Minutes
Redundancy Insurance (also called Unemployment Cover or ASU when combined with Accident & Sickness) pays a monthly benefit if you’re made redundant, subject to terms. Is redundancy insurance worth it? It depends on your job security, savings, employer package and monthly commitments. We explain options in plain English and help you choose cover that fits your budget and risk. FCA-regulated advice from friendly specialists. Rated 5★ with 2,500+ Trustpilot reviews and 5/5 on Google.
What you’ll get (quick overview)
Fast, clear quotes for redundancy insurance in minutes.
Cover choices: Unemployment-only or combined Accident, Sickness & Unemployment (availability varies by insurer).
Benefit level set to your needs (often up to a % of income or a fixed amount, limits apply).
Waiting period (deferred period) options explained, e.g., 30–90 days before benefits start.
Payout length clarified, typically up to 12 months per claim (varies by insurer).
Exclusions made simple: voluntary redundancy, known risk, or probation periods may not be covered.
Underwriting and claims support from start to finish.
How it works
You choose a monthly benefit, a deferred period, and a payout length. Premiums depend on role, sector, benefit size and waiting period. If made redundant and eligible, the policy pays the agreed monthly benefit for the set time. Insurers require proof of redundancy and employment history. Some roles, contract types or sectors may be restricted; availability varies by insurer.
Is it right for you?
Useful if losing income would strain your budget, you have limited savings, or your employer package is small. Less useful if you have large emergency funds, strong sick-pay/redundancy terms, or highly secure employment. We’ll map the costs and likely value so you can decide with confidence.
When to speak to an adviser
- You’re on a fixed-term or at-risk role and want clear eligibility checks.
- Income is hard to replace quickly, or you have high monthly commitments.
- You want to coordinate with mortgage protection or existing cover.
- You were declined elsewhere, have recent job changes, or complex terms.
- You need help choosing benefit size, waiting period and claim length.
Trust & transparency
CeMAP-qualified advisers. FCA-regulated. UK-wide support. Rated 5★ with 2,500+ Trustpilot reviews and 5/5 on Google.
As with all insurance, terms, conditions and exclusions apply. If you stop paying premiums, your cover will end.
What is redundancy insurance?
Redundancy insurance (also known as unemployment insurance) is a short-term income protection policy that will cover you for up to 12 months if you are unable to work because of involuntary redundancy. It can be used to protect such things as your loan and credit card repayments, as well as the payments you need to make on your mortgage.
There are situations where you may be ineligible for coverage. So, if you work part-time, work to contracts on a self-employed basis, or if you have been in your current role for less than 6 months, then you might not be eligible for redundancy cover. However, there are specialist insurers who will cover you if you fall under these categories, so it is worth shopping around, especially if your financial security will be put at risk.
You won’t be covered if you take voluntary redundancy or if you are dismissed by your employer.
FAQ’s About Redundancy Insurance
Following approval of your claim, redundancy insurance can provide monthly payouts of up to 70% of your gross income before tax. Payments begin after a set waiting period and continue until new employment is secured or the policy term ends.
If you have savings or a secondary income source, you might not need redundancy insurance. However, if losing your job would severely impact your ability to meet financial obligations, insurance could offer crucial support.
Redundancy insurance, also known as unemployment insurance, is a short-term income protection policy that covers up to 12 months if you are unable to work due to involuntary redundancy. It helps cover expenses like mortgage and loan repayments.
Ineligibility can arise if you work part-time, are self-employed, or take voluntary redundancy. Additionally, being dismissed by your employer can also affect eligibility.
Eligibility for redundancy insurance typically requires full-time employment for at least six months. If you are self-employed or on a temporary contract, you may not be eligible, but specialist insurers may offer coverage in these scenarios.
Do you need redundancy insurance?
If you are particularly worried about being made involuntarily redundant, then yes, you should probably start searching for an affordable policy. You should also consider it if you would be unable to meet your usual outgoings after being made redundant, perhaps because of a lack of savings or another income source to meet your financial needs.
On the other hand, if you do have a secondary income (perhaps from your partner), or savings in place, then you might not consider redundancy insurance necessary. You might also decide against taking out this type of insurance if you are close to retirement, and you have a pension in place to help you live comfortably. And you might decide against redundancy insurance if the redundancy pay from your employer is set to cover your financial needs.
How does redundancy insurance work?
If your claim is approved, you will start receiving payouts, usually after a 30-day wait period. If you have opted for a ‘back to day one’ policy, then your payments will be backdated to the start of your redundancy.
How much you get paid will depend on your annual income (usually 70% of your annual income before tax), and there may be capped limits set by the insurer. You will keep receiving payments until you return to work or until the term of your policy has passed.
You can choose between an unemployment policy and an accident, sickness and unemployment policy (ASU). An ASU policy will provide redundancy insurance cover, as well as protection if you’re unable to work due to an injury or if you become sick. This might be more cost-effective than taking out a separate policy to cover periods of sickness and injury. Some insurers also offer the option of protecting the value of any employment benefits you might be in receipt of, such as a company car or private health insurance. These benefits are sometimes known as ‘benefits in kind’, or P11D benefits. Of course, any extra coverage you require will be reflected in your monthly premiums.
A ‘back to day one’ policy means payments begin from the first day of redundancy, subject to a waiting period. If approved, this can ensure quicker financial support.
Payout amounts are typically 70% of your gross monthly income before tax. However, some insurers may impose caps, so it’s important to check policy details for specific limits.
Reducing costs is possible by deferring the start date of coverage if you have savings, opting only for necessary coverage, and shopping around for the best deals from various insurers.
Some policies offer options like accident, sickness, and unemployment coverage, ensuring financial support if you’re unable to work due to disability or illness. Other options include benefits in kind, such as coverage for a company car or private health insurance.
No, redundancy insurance typically does not cover voluntary redundancy. It is designed to provide support in cases of involuntary redundancy only.
How to reduce the cost of redundancy insurance
If you have some savings in place, you can defer the start date of your coverage, as this will bring down the cost of your insurance premium. You can also cut the cost of redundancy insurance by only taking out the right amount of coverage that is needed for your personal situation. And you can save money by shopping around insurers, as if you hold out until you get the best deal for you, then you will have less to pay out in the weeks and months ahead.
If you need more information on redundancy cover, please get in touch with a member of our team using the contact details on our website.
Yes, redundancy insurance can be used to cover mortgage payments, helping maintain financial stability while seeking new employment.
An ASU policy includes coverage for redundancy as well as protection if you’re unable to work due to sickness or injury, potentially offering more comprehensive protection than redundancy-only insurance.
If the redundancy package from your employer sufficiently covers your needs, you might not require additional redundancy insurance. It’s essential to assess whether your expected employer payout will meet your financial obligations.
If you return to work before the end of the term, your payments will stop when you resume employment. The insurance aims to provide support until re-employment.
Consider your job security, alternative income sources, savings, and specific financial commitments. Assess the likelihood of redundancy in your industry and compare policies to determine the most suitable coverage for your situation.