Accident, sickness, and unemployment cover
Find out about shorter-term income protection and explore plans and premiums.
Covers your bills if you can’t work due to illness, injury, or job loss
Short-term safety net
Keep up with rent, mortgage, or loan payments
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What is accident, sickness, and unemployment (ASU)
Income protection through accident, sickness, and unemployment (ASU) insurance can be a crucial financial safety net during unexpected life changes. When you’re unable to work due to illness, injury, or job loss, ASU cover ensures you can meet your financial needs and maintain your standard of living.
When you’re unable to work, an ASU policy gives you a percentage of your regular income, typically between 50-70%, paid out as a monthly benefit. This helps you cover essential expenses like mortgage payments, utility bills, and daily living costs, giving you peace of mind during potential stress and uncertainty.
Key reasons for taking out ASU cover
Take a look a the main motivations people have for arranging ASU insurance.
Mortgage protection
ASU cover means you can continue to pay your mortgage, preventing home repossession and protecting your most valuable asset while your income is interrupted. ASU can also help cover essential financial obligations such as rent payments.
Get your quoteSafer family finances
If you're the main breadwinner, an unexpected job loss or illness could undermine your family's financial stability. ASU cover provides a critical buffer, making sure your dependents are protected and can maintain their lifestyle in challenging times.
Get your quoteSelf-employment security
Freelancers and self-employed people often lack the security of company employment. ASU cover can be an essential tool, with policies tailored to your employment status and specific terms for self-employment that differ from traditional cover.
Get your quoteBridging employment gaps
In a volatile job market, ASU cover can help bridge gaps in your income while you find a new job. This protection allows you to focus on finding the right employment without the pressure of mounting financial problems.
Get your quoteManaging health issues
For people with ongoing health conditions or those in physically demanding roles, ASU cover provides financial reassurance. It means you can focus on recovery or finding other employment without immediate financial stress.
Get your quoteDebt protection
ASU cover helps you continue meeting your financial commitments, such as loan, credit card, and other debts, during periods of reduced or no income. This means you can stay on top of your expenses, prevent defaults, and protect your credit rating.
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ASU vs. long-term income protection
Accident, sickness, and unemployment insurance tends to be the short-term option, but what are the trade-offs?
ASU policies
ASU is usually short-term, typically offering an income for 12-24 months. These policies are generally more affordable and offer quick financial support when you need it most. They’re useful for as a cost-effective solution with rapid payout and less medical underwriting, but be aware of initial exclusion periods when you're unable to make a claim.
Long-term income protection
Long-term income protection is ongoing, potentially covering you until you retire. These policies offer greater financial security for those with chronic conditions or higher-risk occupations, and ensure ongoing support during longer periods of incapacity. At the same time, they tend to have more thorough medical assessments and higher premiums.
ASU cover pros and cons
Advantages
- Financial lifeline: Emergency income when your health impacts your ability to work.
- Flexible premiums: Adaptable payments and policy options to suit your individual needs.
- Quick support: Fast financial assistance compared to other types of income protection.
Disadvantages
- Premium costs: Plans can be expensive depending on your chosen coverage type.
- Complex terms: Policies may have complex coverage options, definitions, and eligibility criteria.
- Limited cover: Not all illness and unemployment situations guarantee complete coverage.
Should I take out ASU cover?
If you have limited savings, work in an unstable industry, or have dependents relying on your income, ASU cover can be a wise financial strategy. You may be a particularly good candidate if your profession is known to be unsteady: freelancers in the gig economy, those in sectors undergoing change, or people with limited financial buffers. Consider not just your current income, but your industry's resilience, how likely you are to find a new job, and your financial obligations.
Types of ASU cover policies
1. Accident-only policies
These basic policies provide coverage exclusively for accidental injuries that prevent you from working. They're typically the most affordable option, but they provide more limited coverage compared to comprehensive plans.
2. Sickness and accident policies
Expanding on accident-only coverage, these policies include protection against both accidents and specific medical conditions. The sickness insurance element offers broader protection, covering a wider range of situations that might prevent you from working.
3. Comprehensive ASU policies
The most extensive coverage option, comprehensive ASU protects against accidents, sickness, and unemployment. These plans are more robust and holistic, offering income during all sorts of situations that could interrupt your income stream.
4. Mortgage payment protection insurance (MPPI)
Specifically designed to cover your mortgage repayments while your income is interrupted, these policies make sure that your most important monthly payment remains covered. This is a key safeguard against having your home repossessed.
5. Unemployment-only policies
Unemployment insurance policies are specifically built for income support during involuntary unemployment, offering stability when you need it most. Focusing exclusively on job loss, these plans are particularly useful in industries with high redundancy rates or during periods of economic uncertainty.
6. Excess protection policies
These policies offer additional coverage beyond the standard protections. The extras might include extended benefits like medical assessment fees, support for job retraining, or out-of-pocket expenses during financial hardship. Excess protection is a premium option for those seeking maximum financial security.
Finding the best ASU cover
As you explore the market, keep our checklist to hand. It'll help you find the ideal ASU plan.
Our expert says:
‘’ASU cover can shield you when unexpected job loss or illness strikes. A thoughtfully-selected plan can be a lifeline, turning financial uncertainty into a challenge you're able to manage and overcome.”
Frequently Asked Questions
How long does a typical ASU policy pay out?
Short-term ASU policies typically provide benefits for 12-24 months. The duration depends on your chosen policy type and individual terms. Understanding these timeframes is important for good financial planning and setting realistic expectations about your cover. Providers often have strict assessment criteria when arranging a payout period. They’ll consider your medical condition, your ability to work, and how well you might rehabilitate. This assessment is so that their payouts are fair, targeted, and in line with your genuine need for support.
What's not typically covered by ASU?
Pre-existing medical conditions are often excluded from standard ASU policies, while some insurers may impose waiting periods or other controls. This is why full health disclosure is crucial from the outset, so that you're not left unexpectedly without cover. Additionally, certain high-risk occupations might face limited coverage or higher premiums. Construction workers, deep-sea divers, or professional athletes might find their insurance options are more limited or expensive compared to office workers, for example.
How quickly can I claim ASU cover?
Most policies have a waiting or “deferred” period before benefits start, typically ranging from 30 to 180 days. This period gives insurers time to verify the claim while you look into alternative sources of income.
Can self-employed people get ASU cover?
Self-employed people can often access ASU policies designed for their unique working situation. These policies often have more flexible terms to match what can be an irregular income. Providers will need to see proof of consistent income over a specified period, usually through tax returns or accounting records. This helps them decide on the correct coverage level.
Can I get critical illness insurance with ASU?
ASU and critical illness cover are related but distinct forms of protection. ASU provides monthly income replacement if you can't work, while critical illness cover offers a one-time lump sum payment if you're diagnosed with specific serious conditions like cancer, stroke, or major organ failure.
What happens to my cover if I change jobs?
Most ASU policies are portable and can carry on if your employment changes. At the same time, they might need to be re-evaluated based on the needs and characteristics of your new role. This ensures that your policy stays relevant and is priced accordingly.
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