What Is Unemployment Insurance?

Why you might need unemployment insurance and how it can help.

Unemployment Insurance is the term used for insurance policies that provide financial aid in case of a loss of employment (except for voluntary resignations). These policies entitle you to monthly payments for up to an entire year! Unemployment insurance can protect your financial well-being in difficult times and is available to anyone working for more than 16 business hours per week in the UK.

The monthly payments are made per your previous salary. In most cases, unemployment insurance pays you two-thirds of your regular income. These policies can be seen as a financial life jacket for you and your loved ones should you lose your job due to circumstances beyond your control.

Let’s look at unemployment insurance in more detail and answer a few of the most common questions you may have. 🤔

Why unemployment insurance?

Unemployment can unfortunately happen to anyone at any time, and while it’s easy to think that you’ll find another job immediately, it’s often hard to know and the job market is often not that kind. It can be months before you find a new job, and as we all know, the bills keep racking up. 😔

This is where unemployment insurance can prove to be invaluable. In a fast and volatile job market, unemployment insurance will give you the much-needed breathing space in case things go wrong.

It will provide you with financial relief and support. This will allow you to focus on finding your next job while maintaining your normal lifestyle.

How does it work?

Once you have purchased unemployment insurance, you will be requested to complete an initial exclusion period. During this period, you cannot make an unemployment claim if you are found redundant or informed of your potential redundancy.

After this exclusion period, you are good to go! Just continue paying your premiums each month, and if you ever find yourself unemployed, it’s time to contact the insurance company.

The insurance company will probably request your insurance documents, and if all things are in order, you will be paid your sum insured.

If all the criteria is met successfully, you will be eligible to claim your unemployment benefits. Unemployment insurance pays a monthly tax-free sum to policy owners. As part of the benefit, you can opt for the amount to be paid every month or even opt for a set percentage of your income to be paid out.

Coverage

It covers situations that are not under your control, such as the company having to lay off 50% of the workforce because of global economic issues or a company bankruptcy. 😲 However, it will not cover any actions that are in your control. For example, actions such as being dismissed for workplace misconduct will generally not be covered.

Do I need it?

If you are a salaried employee, then we believe that it might be worth exploring the benefits of covering yourself against unforeseen unemployment in the future.

We know you are probably thinking - “My employers need me too much, I can never lose my job” or something like “I have many skills, I’m sure I can find a new job in no time”.

While this might be true at the moment, we live in a fast-paced and uncertain world where things can change very quickly. It’s easy to feel confident when things are going well, but in truth, no one can ever be prepared for unexpected life changes. Something as big as losing a job can adversely affect both you and your family. Apart from not meeting your personal needs and paying the bills, it can also disrupt your plans. Relying on the money you put aside for your children’s future is the last thing you’d want to use.


We don’t currently offer unemployment insurance, but what we can offer you is life insurance. Something to prepare yourself, for if the worst should happen. As we’ve discussed, we never know what life can bring and believe that being prepared is crucial for your loved ones. If you have any other questions, feel free to contact us at alexa@bequest.com 🙌

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FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

0203 916 5433

FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

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