It has been mooted in the press that some major insurers may be considering pulling out of the Redundancy Insurance market, to new customers. Norwich Union already has for redundancy insurance by itself, and many of the smaller insurers are likely to take their lead.
Well, after all, these are unprecedented times, and the rulebook is out of the window; at least for the time being. Today the MPC cut bank of England Base rate to 2%; last time that the BOE Base rate stood at 2%, rationing was still in force. That’s how bad things really are. Mr Brown has come up with a very woolly mortgage rescue plan, for those that have lost their jobs, and therefore their income, through no fault of their own.
He knows that it won’t cost the Government very much because:
- most will not be able to claim
- as interest rates are so low, monthly mortgage costs are the lowest they have ever been
But what about the other costs of living? You know the loans, the credit card payments, fuel and other sky high costs. What about the council tax; if you don’t pay this, you can go to jail!
These costs, most of which are fixed, essential and non discretionary in nature, amount to a far higher portion of net family income than mortgage costs do right now.
With around one in 12 of us set to lose our jobs, as far as Redundancy Insurance is concerned, there is a problem looming. In the case of other products, if there is an increase in demand, more suppliers jump in to make a buck, but generally prices rise a little and we have a thriving market.
However, Redundancy Insurance sales are going through the roof, because it’s all bad news in the job market. Many insurers are beginning to feel that the risk that Redundancy Insurance poses to their books is unacceptable and they pull out. This will reduce the spread of risk over the industry, to fewer and fewer insurers, and guess what; they pull out of the market too. It will very soon become a case of, the greater the need, the harder it is to satisfy.
If you really don’t want the financial worries that come with losing your job, and certainly don’t want to rely on Gordon Brown; take out Redundancy Insurance, whilst it’s still an option. Redundancy Insurance can be included in the following ASU policies: