Accident sickness insurance | accident sickness unemployment insurance

ASU-4U provides protection for you in the event that you are unable to work due to accident sickness or unemployment. There are state benefits that cover you if you’re too ill to work but they may not meet all you needs and requirements.

Accident Sickness & Unemployment (ASU) insurance ensures that you are able to meet you living expenses in the event you are unable to work through accident sickness and unemployment. When deciding whether you require ASU insurance it is a key question to ask yourself – could you afford to be out of work for a long period of time as a result of accident sickness or unemployment.

The main aim of ASU is to meet your financial outgoings and help maintain a reasonable standard of living. You pay for an amount of monthly cover and if you are unable to work you get that amount of money each month to cover your costs. In most cases policy’s pay out for up to a year.

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The latest figures from the Office for National Statistics (ONS) highlights that UK unemployment fell by 35,000 from last December to February. A fall of 0.1%.

The recent scandal over mis-sold PPI has resulted in people running scared of MPPI - Mortgage Payment Protection Insurance, which could be just what they need in these times of high unemployment. Many providers have now put a stop to selling MPPI policies due to to tighter controls over sales of the cover. Lloyds banking group quit the market in July 2010, and Santander in January 2012. Of those lenders that remain selling MPPI, many fear borrowers may confuse the product with the widely disgraced payment protection insurance (PPI), which is intended to cover monthly payments for credit cards, personal loans and other types of unsecured borrowing. These firms have been widely criticised after increasing their premiums and reducing covers at a time when many people will be looking to claim for unemployment - leaving them to refund the increases to the total of £60m. Speaking to The Guardian, Louise Scott, who works for Yorkshire building society, said:

"We are concerned that the recent coverage around the mis-selling of PPI is misleading and even confusing some customers. As a lender we are anxious that some individuals will be put off purchasing protection insurance to help cover their mortgage – something that we feel is essential for homeowners to consider."

According to The Guardian, 'Mortgage payment protection insurance is designed to cover monthly repayments if a borrower is unable to work through accident, sickness or unemployment. Policies are annually renewable, and if a claim is made payouts last for a relatively short period – typically a year. About two million homeowners are believed to have policies, and research by the Competition Commission revealed that before the start of the recession 28% of premiums were paid out in claims.' Which? said:

"We believe mortgage borrowers should consider buying MPPI. While income protection – which replaces part of your salary in the event of illness over the long term – should be the first choice for people who need cover against the possibility of being unable to work through ill health, MPPI can be a suitable alternative if you can't afford full income protection."

Nevertheless, the advisor says you need to be careful which policy you select. Which? said:

"We have detected a deterioration in the quality of some deals, with insurers forcing customers to wait longer for payouts and making it harder to claim. Most MPPI policies will now not start paying out until 120 days after you took out the cover if you become unemployed, rather than the 60 or 90 days that was typical three years ago. Furthermore, many providers have increased the amount of evidence required by policyholders to make a successful claim."

Which? has released a list of things to check if you want to investigate your policy yourself: ? The initial exclusion period. As mentioned, most MPPI policies will not allow you to claim if you lose your job within a set period of buying the policy. This period is likely to be longer – as much as 120 days – if you are covering an existing mortgage. Presumably the insurer thinks you believe you are likely to be made redundant. The exclusion period on policies taken out to cover new mortgages is likely to be 0-60 days. ? What evidence you will have to provide if you make a claim. Stress and back pain are the two main reasons for people being off work, and insurers can vary widely in what information they require to prove claims for these conditions. Most want claimants to provide evidence of their condition from a specialist, not only their GP. NHS waiting times could make this a very long process. ? Whether pre-existing conditions are excluded. If you are already suffering or have suffered from a condition that may lead to you having to stop work, it is vital to ensure you buy a policy that will still pay out. Many will not. ? Will the policy pay out if you are self employed? Many policies contain restrictive terms and conditions which make it virtually impossible for the self-employed to claim. ? Whether you have other sources of income if you do have to stop work through ill health. You might not need a policy if your employer offers sickness benefits. Even if your employer doesn't, you can still claim statutory sick pay from your employer, worth £81.60 a week for up to 28 weeks, provided you normally earn at least £102 a week. You may also qualify for government help with your mortgage – support for mortgage interest pays the monthly interest (at a rate of 3.63%) on qualifying mortgages. Visit www.direct.gov.uk for information.