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Almost everybody in New Zealand has to remain in work until retirement so that they can afford to meet their mortgage repayments, general living as well as putting food on the table. However, even if you’ve landed your dream job with a high salary and excellent progression opportunities, you never know what the future might have in store. If you want to secure peace of mind about your future finances, regardless of what happens at work, then you could protect yourself by applying for Redundancy Insurance.
Why Should I Insure Myself for Redundancy?
There was a time when people, assuming they worked hard, could expect to remain working with the same company until they reached retirement age, but unfortunately this sort of job security has diminished. From entry-level staff to senior executives, anyone can be made redundant at any time making Redundancy Cover increasingly crucial.
The current WINZ unemployment benefit is just over $200 per/ week for a single person 25 years and over. Would this be enough to cover your bills, mortgage, food and allow for any extra unexpected costs?
It may take months to find a job that offers the same remuneration package and benefits as you had in your previous employment. Do you want to be in the position, where you have to accept a job offer that really doesn’t suit you because you need the money?
Four out of ten New Zealander’s reported that they were unable to pay their bill for more than one month after losing their salary due to redundancy.
Only 8% of people can cover all of their expenses for six months after being made redundant.
How does Redundancy Cover Work?
Different providers offer varying benefits as part of their Redundancy Insurance Cover, but you will usually start receiving payments 30 days after the official date of your redundancy.
A typical policy will include the following:
- Redundancy payments for six months following the loss of your job.
- Up to 45% of your previous income or 100% of your monthly mortgage payments, whichever works out to be more beneficial to you
- Minimum requirement of six months after your redundancy cover is issued to be eligible to make a claim.
On most policies, you can claim twice over you policy life time.
- You may not be able to purchase redundancy cover if rumours that, the company you work for is planning to downsize, have been made public.
- More often than not, you are able to claim even if your employer gives you a redundancy package.
- You will need to provide proof of current income to receive cover.