What is redundancy insurance?
Although you may have heard the term 'redundancy cover' at some point in your research for life insurance and income protection, it is important to remember there are laws regarding what kind of companies can offer insurance for loss of employment in Australia.
Two insurers we work with, Comminsure and OnePath offer an unemployment benefit, if you’re insured with the same company that provides your mortgage or debts (Commonwealth Bank and ANZ respectively).
The unemployment benefit they offer will pay the minimum monthly loan repayments held with CBA or ANZ (up to $5,000 per month) for a maximum of three months, in the event of involuntary unemployment.
Importantly, Comminsure and OnePath are only able to offer redundancy cover for people who already hold a loan through either the Commonwealth Bank, Bankwest or ANZ.
It must also be noted that there are significant differences in the terms and conditions of these two products. Your eligibility for either product is determined on a number of factors, and all these can be discussed with one of our dedicated insurance consultants over the phone.
While redundancy cover may not be right for you, some companies offer policy inclusions that can help in the event of involuntary unemployment.
For example some insurance providers may offer options such as waiving your premiums for a specific number of months in the event of loss of employment, or you may be able to have your premiums and cover “paused” temporarily depending on the terms and conditions stated the PDS of your policy.
As there are many specific variables that can determine your eligibility for any form of redundancy insurance, Lifebroker advises you to refer to the Product Disclosure Statement of your policy for more information.
Lifebroker is an expert in Life Insurance. With over 10 years’ experience helping Australians make confident decisions about their financial future, Lifebroker is here to help take the confusion out of personal insurance.
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