According to the latest report by the IMF, the world is entering a major downturn. The outlook for Britain is equally bleak as the IMF slashes Britain’s growth figures from 1.7% to -0.1% in 2009. In turn with the economic downsizing, they predict a sharp rise in unemployment, reaching 6% by the end of 2009 . We have already started to see growing signs of redundancies hitting Britain’s shores, with an estimated 120,000 jobs to go by the end of 2009 in London alone. So in these troubled times it's worth understanding what can be done to protect yourself if the worst were to happen.

One option for employees, who are not currently in danger of being made redundant, is to opt for Payment Protection Insurance (PPI). PPI covers you against an accident, sickness or unemployment (including redundancy). The usual protection cover is for around a year, in the case of an individual being made redundant, however each policy will vary.

 

Although, the insurance is intended to aid you meet any financial commitments you have while unemployed, it will not give you 100% of your salary. Typical payouts range from 50 to 70% of your monthly salary, so you will still be worse off than if you had retained your job, however the aim is to cover your main financial commitments such as a mortgage.

 
The cost of the cover can vary significantly, depending on the level of cover you require and how soon after you are made redundant that you would like the payments to begin. PPI can be an invaluable policy to have if the worst should happen as it will allow you time to get back on your feet and find the right job. However, it is important to take out the insurance before you realise there is a danger of being made redundant or the policy is unlikely to pay out.