What is Accident, Sickness and Unemployment Insurance?

If the worst were to happen, and you were made involuntarily redundant or unable to work because of an accident or illness, do you know how you’d support yourself?

Losing your income is one of life’s most stressful occurrences – whether that’s due to involuntary redundancy, or an unforeseen injury or ill health.

Sometimes, no matter how hard you work, or how dedicated you are to living a healthy, balanced lifestyle, things happen that are simply beyond your control.

The last thing you’d want to worry about while looking for work, or recovering from an illness, is falling behind on your bills. However, for many people, covering financial outgoings without a regular income would be almost impossible.

Of course, in the event that you’re made involuntarily redundant and find yourself out of work, there is the option of Job Seeker’s Allowance.

But at about £75 per week for adults over the age of 25, for many people, this wouldn’t be enough to cover even the most basic outgoings, let alone rent or mortgage repayments, or payments towards a vehicle.

Even more worryingly, as many as 41% of people will be made redundant, or need to take time off because of ill health during their working lifetime, and when it comes to savings, a quarter of UK households have less than £95 to fall back on.

In the context of accident or sickness, the situation can be just as troubling. Increasingly, employers in the UK don’t tend to offer company sick pay, which means that many people would be forced to rely on Statutory Sick Pay (SSP) if they became unwell and were unable to work.

As with Job Seeker’s Allowance, the amount you receive on SSP is much less than many people expect, and again, hardly enough to cover the cost of food and bills. At about £89.35 per week, it’s less than one fifth of the average UK weekly wage.

Fortunately, this is where Accident, Sickness and Unemployment Insurance comes in.

Also known as ASU insurance, this is the most comprehensive type of income protection on the market, covering you if you lose your job unexpectedly, or are unable to work because of an accident, injury or illness.

By providing a tax-free monthly sum paid straight into your bank account, Accident, Sickness and Unemployment Insurance offers financial security and peace of mind, at the time when you need it most.

Acting as your own personal safety net, these policies give you a tax-free payment known as a monthly benefit amount, for up to 12 months in any one claim.

The amount you receive depends on how much you earn, but can be up to 65% of your gross monthly income. Because the money is paid straight to you, it doesn’t need to be linked to a loan or mortgage repayment, and you don’t need to disclose your outgoings.

To be eligible for Accident, Sickness and Unemployment Insurance, you must be aged between 18 and 64, and a permanent resident of the UK, Channel Islands or Isle of Man.

As long as you’ve been working full-time (more than 16 hours a week) for the same employer for more than 6 consecutive months, you should be able to purchase a policy and make a successful claim if you need to.

When it comes to the unemployment part of the policy, you must also be able to prove that you weren’t aware of any potential redundancies or restructuring in your place of work, otherwise any claim you make won’t be valid.

Before buying income protection, it’s important to bear in mind that you won’t be able to claim for any pre-existing medical conditions, unless you’ve been symptom free for at least 24 months.

To find out more, we recommend speaking to one of our Income Protection Specialists. They’ll get to know your situation, and search the market to find the right policy for you at the best price. You can’t predict what’s around the corner, but with Accident, Sickness and Unemployment Insurance, you can prepare for it.