Accident Sickness and Unemployment Insurance Guide

About ASU Cover

There are a number of different forms of ASU insurance (accident, sickness and unemployment insurance) and in the current financial market, more and more people are seeking more information about this type of insurance in an effort to learn more about how they can insure against the possibility of unemployment. ASU insurance is a broader term for different policies, such as payment protection insurance (or PPI) and mortgage payment protection insurance (or MPPI), designed to protect your family so that the bills and mortgage can still be paid in case the worst should happen. With unemployment standing at over 2.5 million in the UK, this type of insurance is critical for working families or anyone with any type of debt.
Which policy is suitable for you depends on a number of factors, including your incomings and outgoings, the accident and sick cover policy at your workplace, how much money you earn and your budget. The following information is intended as a guide to ASU insurance, but for further information or if you have any questions, please feel free to contact me.

ASU Insurance Definition

What would you do if you had an accident, developed an illness or were suddenly made unemployed? How much money would you need to keep paying the bills? Would you be able to pay the bills? Statutory sick pay will pay out £86.70 for a maximum of 28 weeks, while state benefits, if you are made redundant, could pay out £56.80 per week. This is unlikely to be enough to cover your general month-to-month payments, never mind the “luxuries” that most families enjoy each month, such as television, mobile and internet services, trips to the cinema or a takeaway or two. If the worst were to happen, without an insurance policy such as ASU cover you could struggle to pay the mortgage or rent, energy and water bills, travel costs and for basic things such as food and drink.

How Much Cover Could I Get?

ASU insurance will pay out a tax free monthly income for between 12 and 18 months if you can no longer work due to an accident, sickness or after being made redundant. The amount of money that you could receive is typically up to 50-65% of your gross monthly income, although the maximum that most companies pay out per month is up to £1500. However, this money can usually be used to “top up” any benefits that you might receive, such as statutory sick pay from your employer along with any other benefits that they may pay. The idea is for the ASU cover to top up your income during the months that you are unemployed or unable to work, for a period of up to 18 months or when you become employed, whichever comes first.

Is ASU Cover Suitable for Me?

ASU cover is suitable for anyone who wishes to cover themselves against the threat of short-term unemployment, due to accident, sickness or redundancy. The key thing to remember about ASU cover is that it is short-term – it is not designed to cover you for long periods of time and if you wanted cover for a longer period of time, such as up to retirement age, a policy such as income protection insurance might be more suitable. Income protection insurance covers against long-term illness or disability and can pay out money for loss of earnings or a drop in salary. ASU and IPI are completely different insurance policies, so if you have any questions about which policy is right for you, please feel free to contact me for more information.

When Can I Claim?

When taking out the insurance policy, you can choose the excess period for the policy or the amount of time that you must wait before you can make a claim. Typically, you can choose from 30 days, 60 days, 90 days and 120 days, and in general, the longer your excess period, the cheaper the insurance policy. You can also choose to pay extra to backdate your payments, meaning that if your excess period is 120 days, the payment will be backdated to the very first day that you had your accident,

got ill or were made redundant. However, for the initial excess period, you may struggle financially. It’s a good idea to start saving small, regular amounts when you take out an insurance policy such as this so that you have a bit of a financial cushion should you have to claim whilst you wait for the money to be paid out.

What Type of Cover Will I Get?

Accident, sickness and unemployment cover differs depending on your own personal needs. You might opt for an all-in-one policy that will pay out money directly for you to use to pay your mortgage and other bills, a policy that pays out money for your mortgage alone (MPPI) or a policy that pays out money for your income alone (PPI). When buying an insurance product like this, it’s important to tell your financial adviser all of the details about your current situation so that they can advise you on which type of cover is best for your needs.

How Much Does ASU Cover Cost?

The costs involved in ASU insurance depend on a number of things, including whether you are a smoker, your age, occupation (smokers are more likely to develop certain illnesses than non-smokers while people who are in certain occupations may be more likely to have an accident or develop an illness than individuals in other occupations), what you want cover for, such as your general income or your mortgage, the amount of cover you need, the claim period, the deferment period and whether you want payments to be backdated.

Can I Buy ASU Cover if I am in a Redundancy Consultation Period at Work?

No. ASU cover is only available for individuals who are not in a redundancy consultation period at work. If you are notified about any potential redundancies within the first six months of the policy beginning, you should notify the insurance company that sold you your policy as it will no longer be valid. Redundancy claims can generally only be made after the first six months of holding the policy.
You are also unable to claim on your ASU insurance if you take voluntary redundancy.

My Outgoings Have Changed, What Do I Need to Do?

If your monthly bills increase and you do not update your insurance policy, you’ll be left underinsured and you may not have enough money to cover the bills should you need to claim. If your monthly bills decrease, you’ll be overinsured and paying more in premiums. Any claim that you make is always subject to provable bills. Let your insurer know if your circumstances or outgoings have changed so that they can adjust your policy, and your payments, as necessary.

Does ASU Insurance Cover Self-Employment?

Yes, but you can generally only use ASU cover to protect against accident and sickness, rather than unemployment, as to prove that you are unemployed and cannot find work you would generally have to prove that your business/self was insolvent. This is usually time-consuming and difficult to prove and so many insurers would only offer accident and sickness cover. You’d also need to be able to prove your monthly income and outgoings in order to make a claim.

How Do I Apply for ASU Insurance?

One option is to use price comparison websites and go it alone. You can use the information above that may help some of you get suitable cover. However I would suggest using a financial adviser like myself. The benefit of this is that they can identify your situation and recommend the most suitable solution for you.
I make the process as straight forward as possible and fill in all the paperwork for you. If I deem it suitable to put the policy in trust I do this as part of the service for free. You will find the quotes I provide both competitive and explained in straightforward jargon free language.