Money Expert > Life Insurance > Accident, Sickness and Unemployment Insurance
Accident, Sickness and Unemployment Insurance
Be safe. Get life insurance. We can help.
Last updated: 13/03/2025 | Estimated Reading Time: 6 minutes
Money Expert > Life Insurance > Accident, Sickness and Unemployment Insurance
Be safe. Get life insurance. We can help.
Last updated: 13/03/2025 | Estimated Reading Time: 6 minutes
Accident, sickness and unemployment insurance (ASU) is designed to provide financial support when you are unable to work due to unexpected circumstances. Whether it's illness, injury, or redundancy, this type of cover ensures that your essential financial commitments, such as mortgage payments and monthly outgoings, are met.
Many people in the UK rely on their salary to cover essential expenses, making it crucial to have a financial safety net in place. Without adequate protection, an unexpected job loss or medical issue can lead to financial hardship. This guide explores accident, sickness and unemployment insurance, how it works, and whether it is the right choice for you.
Accident, sickness and unemployment insurance (ASU) provides a monthly benefit if you are unable to work due to sickness, an accident, or involuntary redundancy. The policy is designed to help cover essential costs such as mortgage or loan repayments, rent, and other household expenses.
When you take out ASU cover, you choose the level of benefit you require, typically a percentage of your monthly income. If you need to make a claim, the insurer pays out a monthly benefit to help cover your financial commitments during your period of inability to work.
ASU insurance is sometimes confused with payment protection insurance (PPI). While both offer financial protection, ASU provides more comprehensive coverage for those unable to work due to health or redundancy, whereas PPI typically covers specific debts, such as a loan or credit card.
ASU insurance is sometimes confused with payment protection insurance (PPI). While both offer financial protection, ASU provides more comprehensive coverage for those unable to work due to health or redundancy, whereas PPI typically covers specific debts, such as a loan or credit card.
Mortgage payment protection insurance (MPPI) is a type of ASU policy that specifically covers mortgage payments. This ensures that if you are unable to work, your mortgage repayments are still made, preventing repossession.
Statutory sick pay (SSP) in the UK provides limited financial assistance if you are unable to work due to illness. However, it is often insufficient to cover all monthly expenses, making additional sickness insurance essential for many.
Unemployment insurance ensures that you receive a monthly benefit if you lose your job through no fault of your own. This can be crucial in covering mortgage payments and other essential expenses while you look for new employment.
Most ASU policies have a waiting period before benefits begin. This is typically between 30 and 90 days. Choosing a shorter waiting period may result in higher premiums.
Sickness cover under ASU is designed for short-term financial support, while income protection cover offers long-term security for those unable to work due to illness or injury.
Most policies provide monthly benefit payments for 12 to 24 months. Long term income protection policies, on the other hand, can cover you until retirement.
Many homeowners take out ASU insurance specifically to cover mortgage payments. This ensures that their home is protected even if they are unable to work.
The cost of ASU insurance varies based on factors such as age, occupation, coverage level, and waiting period. Policies with a longer waiting period tend to have lower premiums.
Self-employed individuals do not qualify for statutory sick pay, making ASU or income protection an essential consideration.
Policies typically exclude claims resulting from pre-existing conditions, voluntary unemployment, and high-risk occupations.
If you have substantial savings, you may not require ASU insurance. However, for those without financial reserves, ASU provides essential security.
While statutory benefits provide some financial relief, ASU insurance offers a more reliable and sufficient source of income during periods of unemployment or illness.
For many, ASU insurance is a worthwhile investment to protect against financial instability. If you rely on your income to cover essential expenses, ASU can provide much-needed peace of mind.
Accident, sickness and unemployment insurance is a valuable tool for those seeking financial security in the event of unexpected job loss or illness. While statutory sick pay and other government assistance exist, they are often not enough to cover mortgage payments and other necessary expenses. By choosing the right ASU policy, you can ensure that your financial commitments are met, giving you peace of mind and stability during challenging times.