Unemployment Protection Insurance
Best’s unemployment protection policies are here to guard your finances against unemployment, which is always so draining otherwise – both financially and emotionally. With your bank account, lifestyle, and responsibilities protected, you can go about your job hunt with the luxury of choice, able to take what occupation suits you Best and not just what will keep a roof over your head.

Best’s unemployment protection policies are here to guard your finances against unemployment, which is always so draining otherwise – both financially and emotionally. With your bank account, lifestyle, and responsibilities protected, you can go about your job hunt with the luxury of choice, able to take what occupation suits you Best and not just what will keep a roof over your head.
What exactly is unemployment protection insurance?
‘Unemployment protection insurance’ may sound intimidating, but it’s essentially a safety net for unexpected job loss. Like accident & sickness insurance, it’s a personal policy tailored to your situation, acting as a financial lifeline if you lose your job.
If you lose your job through no fault of your own, your policy will pay a monthly benefit — up to £2,500, depending on your income. Once you return to work, the payments stop, but the policy remains active as long as you continue to pay, ensuring you’re covered if you lose your job again.
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Why is unemployment protection insurance important for UK residents?
While UK residents might be able to get benefits like Universal Credit when they’re unemployed, the unfortunate truth is that most UC payouts aren’t enough to live off of even in the short-term. With unemployment protection insurance, you can get up to 65% of your pre-redundancy income covered, which means you’ll be able to keep up with most of the financial commitments you’ve previously had to cover. Whether that’s a mortgage, rent, or even just your weekly shop, it’ll all be covered by your unemployment protection insurance.
With the cost of living crisis in the UK, unemployment protection insurance has become an invaluable safety net for UK residents in case the worst should happen. No one wants to be left worrying about how they’re going to pay their mortgage or rent, or how they’re going to put food on the table. With unemployment protection insurance, you don’t have to!
Key Benefits of Unemployment Protection Insurance
Unemployment protection insurance has loads of perks, the most obvious of which is the benefit payment you get while out of work. But that’s not the only plus to getting yourself an unemployment protection insurance policy. There’s also:
- Coverage for essential expenses, like grocery shopping or rent;
- Financial stability during periods of unemployment;
- Peace of mind and an end to financial stress;
- Customisable coverage (with benefit amounts, benefit periods, IEPs, and more all down to your own personal preference);
- The flexibility to find the job that suits you.
How does unemployment protection insurance actually work?
Unemploment protection insurance can seem complicated if you’ve got no experience with it, which is why we’ve broken it down for you.
Eligibility Criteria for Unemployment Protection Insurance
You’ll be eligible to apply for unemployment protection insurance if you:
- Permanently reside within the UK;
- Are aged between 18-64;
- Have been in continuous permanent employment for the last six months with the same employer for more than 16 hours a week;
- Are not self-employed, a contract worker, or an agency worker;
- Are not subject to any disciplinary action or ongoing enquiry by your employer;
- Are not aware of any circumstances that might lead to you being made unemployed or becoming a carer;
- Are not currently off work or working reduced hours because of ill health.
How Unemployment Protection Insurance Covers You
Unemployment protection insurance is a valuable safety net for anyone concerned about financial stability. It replaces your income if you lose your job through no fault of your own, such as redundancy.
After a short ‘excess period’ (chosen when you purchase the policy), the insurance provides temporary income to cover essential expenses while you find your next steps. Coverage typically lasts up to 12 months per claim. For example, if made redundant, you could receive a monthly payout of £2,500 for up to a year after your 30-day excess period.
Even after the 12 months, your cover doesn’t end. Once back in work, you’re free to claim again if you lose your new job in the future. Designed to provide lifelong support, unemployment protection insurance ensures peace of mind so you can focus on living, not worrying.
How should I compare unemployment protection insurance quotes?
When taking out unemployment protection insurance, research and compare options to find the best fit for your needs. Insurance isn’t one-size-fits-all, so it’s important to choose a policy that suits your personal circumstances.
Start by assessing your financial situation—income, bills, and expenses—to calculate how much cover you’d need to maintain your lifestyle if unemployed. Having this information ready will also speed up the quote process.
Next, explore coverage options using price comparison websites like comparethemarket.com or Go Compare to find a policy that balances affordability and adequate cover. If confident, you can purchase directly online.
For tailored advice, consider contacting brokers or insurers. For example, Best Insurance (0330 330 9465) can guide you through your options, explain restrictions and exclusions, and help you choose the best policy for your needs.
Whoever you choose, ask plenty of questions to fully understand your policy and avoid surprises when claiming. Good questions include: “What is an excess period?”, “How does an initial exclusion period work?”, and “What benefit amount could I get with my income?”. Remember, no question is too small when it comes to insurance!
When should I apply for unemployment protection insurance?
It’s best to apply for unemployment protection insurance sooner rather than later. Younger applicants, such as under-25s, often enjoy lower premiums due to fewer pre-existing conditions or job changes, while coverage becomes more expensive with age.
But a lot of people don’t take out unemployment protection insurance until they’re older, or until they experience a major life event. For example, if you’d recently had a baby, you might be thinking more about how you’d give it a home and provide for it if you lost your job.
Honestly, buying an unemployment protection insurance policy after a major life event is a great idea, because you’re already in the mindset of change. If you’ve recently expanded your family, purchased a new home, taken a new job, or gotten married, it’s in your best interest to take a look at your finances and find a way to protect them.
Cost of Unemployment Protection Insurance in the UK
How much does unemployment protection insurance cost in the UK?
Premiums for unemployment protection insurance depend on factors like your age, salary, and chosen excess period. Younger policyholders usually enjoy lower premiums due to fewer age-related issues or pre-existing conditions.
Your salary determines your maximum monthly benefit, which directly affects your premiums. Higher benefits mean higher premiums, but you can lower costs by reducing your benefit amount or extending your excess period—the waiting time before payouts begin. Longer excess periods typically result in cheaper premiums.
Shopping around with different insurers is recommended to find the most cost-effective policy. Comparison sites like comparethemarket.com or Go Compare can help, or you can call us at 0330 330 9465 for expert advice.
For example, a policy with a £1,400 monthly benefit and a back-to-day-1 excess period might cost £50-£60 per month. Extending the excess period to 30 days could lower this to £45, or to 60 days for £35. Reducing the benefit to £1,000 could bring premiums to £35-£40, even with a back-to-day-1 excess period.
Choose realistically—if £1,000 won’t cover your expenses, a lower premium won’t help when you need to claim. Tailor your policy to suit your needs.
Is unemployment protection insurance worth it?
We can’t determine the best option for you without details, so it’s worth contacting an insurer or broker for personalised advice. Alternatively, you can conduct your own cost-benefit analysis to assess whether unemployment protection insurance is right for you.
Start by identifying the costs (e.g., premiums) and benefits (e.g., benefit payments and peace of mind) of having a policy. Quantify these amounts—for example, by using your premium and benefit figures.
If the benefits outweigh the costs, the policy may be worth it. If not, you could reconsider or adjust your premiums by changing your excess or benefit amount.
Consider your savings too—if you have enough to cover a period of unemployment, insurance may not be necessary. Ultimately, the value of unemployment protection insurance depends on your personal circumstances.
What happens after you make a claim?
How do I file a claim for unemployment protection insurance?
To file a claim for unemployment protection insurance, contact your claim administrator (details in your policy) as soon as possible to avoid delays. They’ll guide you through the process, which usually involves registering at the Jobcentre, providing relevant documents, and answering questions about your unemployment.
Claims typically take around 30 days to process. If delayed, contact your insurer to check the status and see if you can help speed things up. If the delay is excessive or your claim is unfairly denied, you can escalate the issue to the Financial Ombudsman Service (https://www.financial-ombudsman.org.uk/).
Common Reasons for Claim Denials
- Exclusions & Policy Conditions: Claims are often denied for situations excluded from cover, such as leaving your job voluntarily. These exclusions are outlined in your policy, so it’s crucial to read all documents when purchasing your insurance.
- Initial Exclusion Period (IEP): If you became aware of potential job loss during your IEP, your claim may be denied. IEPs exist to prevent people from buying cover after learning their job is at risk. The length of this period is specified in your policy.
Frequently Asked Questions (FAQs)
- Can I get unemployment protection insurance if I’m self-employed?
Self-employed individuals can get unemployment protection insurance, but it’s more challenging than for traditional employees. Policies are tailored and usually require proof of income, such as tax returns or bank statements, to set the benefit amount. Illness and injury are more commonly covered, while unemployment coverage has stricter limitations.
- How long will unemployment protection insurance pay out for?
The typical benefit period for unemployment protection insurance is up to 12 months, though many claims last less. Payouts depend on how quickly you find a suitable job based on your skills and financial needs. Your policy will continue paying until the 12-month limit, after which you’ll need to return to work or rely on savings.
- What are the most common exclusions in unemployment protection insurance policies?
Common exclusions in unemployment protection insurance policies generally include voluntary resignation, fair dismissal (for example, if you were made unemployed because of your conduct), pre-existing conditions (i.e. if you already knew you were going to lose your job when you purchased the policy), and unemployment during the IEP. For a more specific list of policy exclusions, please check your policy wording.
- Is unemployment protection insurance tax-deductible in the UK?
According to UK tax laws, any benefit you receive from your unemployment protection insurance is tax-exempt. That means that you won’t have to pay any tax on your benefit once you’ve received it, so you’ll get the full amount you’re expecting. Unfortunately, though, your premiums aren’t tax-deductible.
- Can I cancel my unemployment protection insurance policy anytime?
You can cancel your unemployment protection insurance policy whenever you like! All you have to do is contact your insurer, whose details you’ll be able to find in your policy wording. If you’ve only had cover for 30 days or less and haven’t made a claim/don’t intend to make a claim, you’ll get your premiums refunded in full. If you’ve been insured for longer than 30 days, though, or you intend to make a claim, you won’t get a refund in your premiums.
- Will my unemployment protection insurance policy cover me if I lose my job through redundancy?
Yes, you will be covered if you lose your job through redundancy — in fact, situations like this are exactly what unemployment protection insurance has been designed to cover. If you’re made redundant, you’ll have to claim through your unemployment protection insurance policy like you would for any other situation.
- How soon after losing my job can I start claiming unemployment protection insurance?
How quickly you’ll be able to get paid will depend on how long of an excess period you’ve selected, as well as how quickly you’ve made your insurer aware of your job loss. Most claims will be processed in about 30 days, but your excess period can be as long as 90 days, depending on what you selected when you purchased your unemployment protection insurance policy. You’ll have to wait for your excess period to finish before you’ll receive any benefit payments.
- Can unemployment protection insurance cover part-time or temporary workers?
Unemployment protection insurance may cover part-time or temporary workers, but this depends on the insurer and policy. These jobs are seen as higher risk, so coverage is rarer and has more restrictions. Some insurers offer coverage for part-timers working over 16 hours a week, while temporary workers may face more limitations but can still find coverage with certain insurers.
- Can I get long-term unemployment protection insurance?
Unfortunately, most insurers don’t offer long-term unemployment protection insurance, because unemployment without cause (e.g. medical issues) should only ever be a temporary thing. If you’re interested in long-term cover, it might be worth checking out long-term accident & sickness insurance, which will pay out in the long-term if you’re taken out of work by an illness or injury.
- Will pre-existing conditions be covered by my unemployment protection insurance?
No, pre-existing conditions are never covered by unemployment protection insurance. In this context, ‘pre-existing conditions’ refers to knowledge that you were going to lose your job at the time of purchase, which no insurer will cover.
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- Years of experience in the unemployment protection insurance market under our belts, which means that not only do we know what we’re talking about, but also that we’ve built up…
- Phenomenal relationships with all the best insurers across the market, so we can find the product that’s right for you
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- Most competitive rates for redundancy protection, designed to work for any budget – whether low or high