A shrinking global economy has made many British workers redundant, which also leaves them unable to pay their bills each month. This situation, which can be brought on by any number of reasons out of the control of the employee, can make for a potentially serious financial hardship. Loss of income doesn't stop the bill collectors from calling; in fact, many become even more aggressive in their practices when people are unable to pay. To protect yourself from such an occurrence, consider the addition of redundancy insurance to your standard life insurance policy.

Redundancy protection moves far beyond the assistance that comes with basic life insurance. This type of coverage kicks in if you lose your job through no fault of your own. With millions of Brits becoming redundant in just two year's time, it is easy to see why redundancy protection might be worth its weight in gold. While it doesn't stop you from losing your employment, it can cover the basic monthly expenses until new employment can be found.

How Does Redundancy Protection Work?
Redundancy protection insurance is designed to cover a portion of your income if you lose your job. The amount varies from policy to policy, but may be as much as 65% of your previous income amount. This is usually a sufficient figure to pay the mortgage and any other monthly expenses that are not optional. Of course, the more redundancy cover you require, the higher your premiums for your insurance will be. You can customize your redundancy policy to your specific needs, to ensure you have sufficient coverage if the need arises.

Most redundancy policies begin paying out within 30 days after you lose your employment. This ensures that you do not lose income for any amount of time once your redundancy takes effect. To be eligible for a redundancy policy, you simply need to have earned income at the time you take out your policy. You do not have to have dependants or even a mortgage to purchase redundancy protection insurance. However, if you do have either, a redundancy policy is an important protection for your specific situation.

The cost of redundancy coverage varies, based on how much coverage you want and the length of your term. You can choose a policy that will fit with both your individual needs and your budget. However, it pays to shop around, since companies may vary significantly in the cost of their redundancy coverage. In a volatile economy, redundancy coverage can give you and your family a financial peace of mind.