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5 Tips for Buying Unemployment Insurance

As the UK economy lurches from bad to worse and the government cuts begin to bite, you can't help but feel no one's job is truly safe at the moment. This leaves us in a precarious position, as most of us rely on the monthly paycheck to cover the bills, rent, mortgage and other household expenses.

Fortunately, help is at hand with unemployment cover insurance. This insurance provides for you in the event of a redundancy, keeping you afloat and preventing the walls of financial doom coming crashing down on top of you. Here are five top tips for finding the best unemployment insurance policy for you:

1. Do you have sufficient savings to support you and your family if you were to find yourself suddenly out of work? This one of the first questions you need to ask yourself when you are considering purchasing unemployment cover. The statistics suggest that most of us don't have enough money saved for a rainy day, and would struggle to sustain ourselves for any serious length of time between jobs.

Unfortunately, the gloomy economic climate means that you could very likely spend several months looking for a new job after being made redundant. A lot of businesses are currently reluctant to take on too many new employees when the future is so uncertain, and many government agencies have frozen their recruitment entirely. So with such limited opportunities on the job market it can take a while to get back into work, and if you don't have a significant pot of savings on standby for such an eventuality then you really ought to consider getting an unemployment insurance policy.

2. The key balancing act with unemployment insurance is finding a policy which provides comprehensive cover but does not charge you too much in your premiums each month. It is therefore vitally important that you consider your situation rationally and cover yourself only for what you need. Don't be tempted into taking as much cover as you can get if you don't actually need it, because the more unnecessary cover you take, the more you will have to pay for it in premiums.

3. Researching online is a great way to see what kind of unemployment cover deals are out there. A good way to start is with price comparison websites, which will be able to give you a good idea of what kind of premiums you are likely to pay for your chosen level of cover. Stick to the big comparison websites, as these will be the most trustworthy and have the most extensive listings of insurance firms.

4. You will find that the firms which offer the cheapest unemployment cover will tend to be particularly selective about who they agree to cover. If you are lucky enough to meet their discerning standards, then you have hit the unemployment insurance jackpot and can expect to pay much less than you would have to with other more mainstream providers.

The other side of this coin is that if your circumstances are not so favourable (for example if you work for a company that has begun to make redundancies), then you may find that only the most expensive insurance providers will agree to offer you cover. Good value unemployment insurance can be particularly hard to come by if you work in the civil service or in a particularly vulnerable industry such as construction.

5. Don't leave it too late to start an unemployment insurance policy. Insurers usually have an exclusion period of between 90 and 180 days from the start of your policy, which prevents you from claiming on the policy during this time. So if your firm has begun to make cutbacks and you expect to be next in the firing line, it may already be too late to open an unemployment insurance policy.