If you were to find yourself unable to work due to unforeseen redundancy then you could have to change your lifestyle. Losing your income would leave you struggling each month to find the money to pay your essential outgoings and keep the roof over your head. However you could take out redundancy cover to safeguard against the financial fall-out of losing your job.

Redundancy cover is available to protect your income in general, loan repayments or your mortgage repayments. When taken out as income protection you can insure up to a certain amount of your income each month against being made redundant.

Every month you will receive a tax free income to help towards your outgoings until such time that you find alternative employment. Most policies run for between 12-24 months.

If you have a mortgage and have the monthly commitments of mortgage repayments then you would be at risk of having your home repossessed. Many homeowners believe that the State would step in and provide money to help them pay their mortgage, however there are strict requirements that must be made. You have to be claiming income support to get help and even then the financial assistance provided is often not the full amount of your mortgage repayments.

Loan protection can be taken out as redundancy cover to help you to continue meeting your monthly loan repayments. This allows you to find another job while having the peace of mind that any loan repayments are still being met.

Alongside redundancy cover you also have the option of paying more for the security of being covered due to being unable to work because of accident and illness. However a policy is not suitable for the circumstances of all and you have to check the terms and conditions of the cover before taking it out. In the past cover has been sold to those who could not claim against a policy.

Some of the most frequent exclusions which can be found in the cover include being in part time employment, suffering a pre-existing medical condition or if you are self-employed. You do have to check to make sure that the provider has not included others, so read the wording very carefully.

Redundancy cover can be offered at the time of taking out the borrowing. However sometimes very little information is given regarding the policy and in some cases cover has been added onto the borrowing without the individual realising. If you want a policy that would be suitable and would work in the way it was designed then you should get a quote from a standalone provider. By doing so you can save an enormous amount of money while at the same time getting all the information needed and it is imperative that you do read this information thoroughly before buying.

You do have to be out of work for a period of time before redundancy cover would begin to provide you with a tax free income. This is usually between the 30th and 90th day of being out of work, with many providers back dating the claim to the first day you became out of work.