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Last updated: 13 November 2020
No matter how prepared you are for life, sometimes the unforeseen has a way of throwing a stick in the works. One moment you have your ducks in a row and then suddenly something happens to mess up your order. While there are things that may be beyond your fixing, one thing you can have control of is your plan B when it comes to financial provisions.
With the right insurance policy, you can have access to financial aid when you need to settle your bills and cover living expenses during difficult times. And this is where accident, sickness, and unemployment insurance can be an excellent “plan B”.
What is accident, sickness and unemployment Insurance?
This type of insurance works similar to most policies. You will be requested to pay a monthly premium and in return, you will qualify for a monthly tax-free payment in the event that you can no longer work. This payment will be paid directly to you if you unexpectedly lose your job due to no fault of your own.
Accident, Sickness and Unemployment insurance (often referred to as ASU) provides you with financial cover during a time where you may need to recover from an injury or illness. It will also help to tide you over should you be made redundant at work.
How does accident, sickness and unemployment insurance work?
Accident, sickness, and unemployment insurance is a short-term income protection insurance
policy that will replace your income for up to 12 months. To qualify for this pay-out, you will need to prove that you cannot work due to an unforeseen accident, sickness or involuntary redundancy.
Accident cover can be bought as a stand-alone product, as can sickness and unemployment insurance. Purchasing the three together under one policy, however, can save you from paying three separate and costly premiums.
When selecting policy terms, most insurance providers will request that an excess or waiting period is set in place. This means that there will be a waiting period from the date of your claim before you start receiving your payments. This deferred period can be anywhere from 30-90 days but keep in mind that your premiums will be lower if the waiting period is longer.
In the unfortunate event where you have to make a claim, then you will receive pay-outs from your accident, sickness and unemployment policy for a maximum of 12 months or until you return to work, whichever comes first.
What could accident, sickness, and unemployment cover be used for?
This type of insurance cover can be used to replace your income in the event where you can no longer work due to involuntary circumstances. It can cover all monthly expenses including rent payments, utility bills, and even mortgage payments.
Some policies, however, can be linked to certain payments only, thus reducing the cost of a premium. For example, some UK ASU policies are linked directly to mortgage payments or loan payments.
Do I need accident, sickness and unemployment insurance?
We suggest that you review your lifestyle and revise your employment contract to see if this type of insurance is necessary for you. For example:
- Does your company already offer sick pay? And if so, for how long?
- Could you maintain your lifestyle and expenses with the sick pay offered by your company?
- Do you have any savings that can be used to cover your bills for up to a year?
Use the answers to the questions above to help you to determine whether accident, sickness, and unemployment insurance will be a good plan for your personal situation.
How much does accident, sickness, and unemployment insurance cost?
As with most insurance policies, your premium will be determined by taking risk factors into account. An insurer will consider your:
- Your age
- Your health status
- Your previous working history
Insurance providers will also quote according to the pay-out total that you expect to receive per month. Keep in mind that they will also consider the initial waiting period that you have agreed to (calculated from the time you make your claim until you receive your first pay-out). The shorter the initial exclusion period is, the more expensive the cost.
For the best-priced policy, we suggest you shop around for quotes before making any rash or final decisions.
How can I compare quotes for accident, sickness, and unemployment insurance?
Now that you have a good idea of what an accident, sickness, and unemployment policy is, perhaps it’s time to gather some quotes?
You can use our user-friendly online comparison
tool to request and then compare the different prices and terms from insurance providers across the UK. Simply fill in a quick form with all of your necessary details and then we will collect the quotes on your behalf.
Making sure that you have the correct insurance policy in place is of utmost importance. This is why we urge you to do a thorough comparison of quotes so that you understand the policy terms and conditions as well as the costs involved.