Income Protection with Redundancy Cover
Standard income protection doesn't cover redundancy. You need ASU (Accident, Sickness & Unemployment) insurance for job loss. ASU covers illness + redundancy but pays max 12-24 months.
Many people assume income protection covers redundancy, but standard policies only pay if you can't work due to illness or injury. If you're concerned about job security as well as health, you have two main options: take out separate redundancy insurance, or get an ASU policy that combines accident, sickness, and unemployment cover.
Cover is subject to policy terms. Pre-existing conditions and voluntary redundancy are typically excluded.
Key Points
- 1Standard income protection = illness/injury only
- 2Redundancy needs separate ASU or redundancy policy
- 3ASU covers accident + sickness + unemployment
- 4Redundancy cover typically 12-24 months max
- 5Qualifying period before you can claim
- 6More expensive than standard income protection
Eligibility Criteria
- Must be employed (not self-employed for redundancy)
- Permanent or long-term contract
- Not already under notice of redundancy
- Minimum employment period (often 6 months)
- Involuntary redundancy only (not voluntary)
Typical Timeframe
Redundancy policies typically have a 90-180 day qualifying period before cover starts, then a 30-90 day waiting period before claims pay out.
Next Steps
- 1Decide if you need illness cover, redundancy cover, or both
- 2Compare ASU vs separate policies
- 3Check qualifying and waiting periods
- 4Review what counts as 'redundancy'
- 5Get quotes from specialist providers
Why This Matters for Your Mortgage
Understanding these details helps you make informed decisions during the mortgage process. Every element of your application—from deposits to documentation—affects your approval chances and the rates you can access.
Lenders assess applications holistically, weighing multiple factors together. Knowing what they look for allows you to present the strongest possible application. This is particularly important for non-standard situations where lender criteria varies significantly.
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Related Questions
For more detailed information about this topic, visit our comprehensive guide:
Protection
Content reviewed: January 2026
CeMAP awarded by The London Institute of Banking & Finance. Cert CII (MP) awarded by the Chartered Insurance Institute.