Accident, Sickness and Unemployment
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Protecting your income is always a good investment, but it’s especially worthwhile in the UK’s current climate. The cost of living crisis is still in full swing, and according to the Office of National Statistics (ONS), redundancies were on the rise by the tail-end of 2024. It’s been getting harder to find a new job in recent years, too, which means that in general, circumstances for people out of work have become pretty unstable. And in 2022, worker sick days rose to their highest rates since 2004!
With an accident, sickness and unemployment insurance policy in your corner, though, you don’t have to worry about any of that. If you lose your job or have to take time away because you’ve been injured or are sick, we’ll give you between 60% and 70% of your monthly income for every month you’re out of work. You can use that monthly benefit for whatever you need to; mortgage payments, rent installments… even your weekly supermarket run!
How exactly does accident, sickness and unemployment insurance work?
Peace of mind for you and your loved ones
Mortgages, rent, bills, cars, mobile phones, groceries, pets, clothing — it all costs money. Would you be able to keep up with the costs if you were to lose your regular income? accident, sickness and unemployment policies allow you to continue paying your monthly outgoings whilst providing the breathing space for you to recover before you return to work or find the right job without the financial pressure.
The most important type of insurance
Many employers do not pay sick pay for accident and sickness; however, everyone is entitled to government-paid Statutory Sick Pay (SSP). Unfortunately, this totals to around £86.00 per week, which doesn’t go very far. With unemployment, if you are made redundant, then you will be entitled to Job Seekers Allowance (JSA); however, this is a weekly payment of just £95.55. Could you survive on that?
A safety net you can rely on
Relying on government benefits will mean that you will need to fall back on your own savings, credit cards, or family and friends, which will quickly become problematic. By having a comprehensive accident, sickness and unemployment insurance policy in place, you are covering yourself against some of the most stressful situations life can deal you and taking control of your future and finances.
Do I need accident, sickness and unemployment insurance?
If you or your family rely on your income to survive, accident, sickness and unemployment insurance is a smart, forward-thinking idea to maintain financial security. Maybe you’re a homeowner with a mortgage or maybe you’re the primary breadwinner; maybe you have children or other dependents who need your job to keep going. If you lack employee benefits like sick pay or have a very limited emergency savings fund, accident, sickness and unemployment insurance coverage can be a great way to ensure that essential expenses are covered even if an unexpected injury, illness, or involuntary redundancy throws a spanner in the works.
What does accident, sickness and unemployment insurance cover?
What is covered by accident, sickness and unemployment insurance?
Your accident, sickness and unemployment insurance policy will cover most injuries and illnesses, as long as they keep you from working. It will also cover you in cases of involuntary unemployment, as long as your job loss was due to no fault of your own.
There are obviously many different things that can fall under the scope of cover, but they include:
- Serious illnesses (e.g. cancer, heart disease, stroke)
- Musculoskeletal problems (e.g. back pain, broken bones, carpal tunnel syndrome)
- Mental health conditions (e.g. depression, stress, anxiety)
- Redundancies (e.g. due to downsizing or reorganisation)
If you’re injured or ill, you’ll only receive your payout if you meet your insurer’s criteria for being unable to work (otherwise known as their ‘definition of incapacity’).
If you’ve been made redundant, you’ll have to prove that you didn’t know about the risk to your job at purchase, and you also won’t be able to claim for unemployment during the first 120 days of your policy (also known as the ‘Initial Exclusion Period’).
What is not covered by accident, sickness and unemployment insurance?
All accident, sickness and unemployment insurance policies will exclude certain types of injuries or illnesses; self-harm and substance abuse, for example, are always excluded.
Some policies will only let you claim if you can’t work at all, while others will let you claim if you can’t work your specific job. You should check what kind of cover you have before you claim.
Any pre-existing medical conditions you have will also be excluded from your cover. If you have illnesses that run in your family, your insurer might also exclude those.
The unemployment part of your cover will only cover you against involuntary unemployment; you won’t get a pay out if you just quit your job or are dismissed for something like misconduct.
If you’re involved in any dangerous hobbies or high-risk sports, your insurer will need to know about those too. If you don’t disclose something that could lead to a claim, you might not receive your payout, so it’s vital to make sure you’re 100% transparent.
Types of accident, sickness and unemployment insurance
There are a range of different forms of income protection insurance for all kinds of people, which is why it’s important to find the policy that’s right for you.
How much is accident, sickness and unemployment insurance?
Accident, sickness and unemployment insurance premiums are affected by a whole range of factors, which include:
Age
Younger individuals usually pay lower premiums as they’re considered lower risk
Health
Pre-existing medical conditions may increase premium costs or lead to policy exclusions
Occupation
High-risk or physically demanding jobs often attract higher premiums
Gender
In some regions, gender may still be factored into pricing, but it’s becoming less common
Waiting period
Shorter waiting periods (before benefits begin) usually come with higher premiums
Benefit period
Longer benefit durations increase the overall cost of the policy
Policy features
Add-ons like inflation protection or riders can raise the premium
Coverage amount
Higher coverage means you’ll be paying higher premiums to offset the risk
What are the benefits of accident, sickness and unemployment insurance?
There are a number of benefits to income protection insurance cover, including:
A regular, tax-free income during periods when you can’t work because you’ve had an accident, fallen sick, or lost your job;
Coverage against multiple forms of financial peril, by which we mean not just poor health, but also redundancy
The peace of mind that comes with financial security
Flexibility to choose how your cover works for you, with customisable qualifying and waiting periods, as well as a benefit amount that’s entirely up to you
How much accident, sickness and unemployment insurance do I need?
Working out how much accident, sickness and unemployment insurance you might need is easy when you break it down into three quick steps:
Calculate your monthly take-home pay, then work out how much of that goes out in your usual monthly expenses; whether that’s bills, housing costs, or day-to-day costs
Then you should weigh up the amount of money you’d get in state benefits and a redundancy package to see how much cover you’d need to tide you over
Make sure to consider extra expenses that might be incurred by your illness or injury (e.g. the cost of mobility aids), then try to find cover for the amount you have left over
How much will my income protection insurance pay out?
Income protection insurance is purchased directly from an insurer or through a broker, with regular premiums paid to keep the policy active. Once set up, there's usually a waiting period (also called the elimination period) before benefits begin – this can range from a few weeks to several months. After that, the insurer provides regular income payments if you're unable to work due to illness or injury, for as set benefit period that could last for a few years or until retirement, depending on your plan.
What do I need to get an accident, sickness and unemployment insurance quote?
Once you’ve figured out what kind of income protection cover you want, we’ll need some information about you, your occupation, and the type of policy you’re looking for.
Your personal
details
We’ll need info about you, your employment, and your health, including your name, age, and address; the type of job you do; whether you’re employed or self-employed; and any pre-existing conditions you have
Your income & cover details
To make sure we’re finding the right policy for you and your individual circumstances, we’ll need to know a couple things, like your annual income before tax and the amount of cover you want
Your chosen waiting period
Your waiting period is the amount of time you agree to wait before payouts begin (usually from 4 weeks to a year). The longer your waiting period, the cheaper your premiums
Frequently Asked Questions
Accident, Sickness & Unemployment insurance (sometimes referred to as ‘ASU insurance’) is a type of personal insurance policy that covers your income if you’re forced to take time off work due to an injury caused by an accident, an illness, or unemployment that isn’t your fault (for example, redundancy). How it works is it offers you a tax-free monthly benefit payment for every month that you’re out of work; most ASU policies will cover typically up to 65% of your usual income up with a cap of typically £2,500 a month. Some insurers restrict this to £2,000 a month or even £1,500 a month. So it really depends on the insurer and policy type. While you aren’t working, you’ll receive that tax-free monthly benefit until either you return to work or your benefit period ends. Most benefit periods are either 6 or 12 months (and often you get to choose how long you want them to last when you purchase your policy), but they can go up to 24 months or even longer – though longer benefit periods are usually only offered by long-term policies.
The most obvious benefit of Accident, Sickness & Unemployment insurance (ASU) is the actual benefit payment, which is paid out to you tax-free on a monthly basis. This benefit payment is intended to cover some (but not all) of your usual monthly income; most policies will cover typically up to 65% of your income with usually a £2,500 cap. Once you’ve received your benefit payment, you can use it for whatever you want – though most policyholders use it to pay for things like their rent or mortgage, their usual household bills, and their day-to-day expenses (for example, their weekly grocery shop). ASU insurance also offers you the total peace of mind that comes with knowing your lifestyle and financial obligations will still be covered even if the unthinkable happens and you have to take a step back from your job – or even if you’re made redundant. That peace of mind is invaluable, because it allows you to go back to living your life and doing all the things that actually interest you without stressing about the nitty-gritty.
Accident, Sickness & Unemployment insurance (ASU) is a great idea for anyone who works more than 16 hours a week and doesn’t have a plan in place for if they had to suddenly take time off work or if they were made unexpectedly unemployed. No one wants to find themselves in the lurch if their income was suddenly put in jeopardy, and with an ASU policy, you won’t have to worry about that.
Accident, Sickness & Unemployment insurance (ASU) doesn’t cover pre-existing medical conditions, which means it won’t offer coverage if you need to take time away from work because of any medical conditions you had symptoms of, consultations about, or treatment for before you purchased the policy, unless you are symptom free and medical free for a certain period of time such as two years. It also won’t offer coverage for any unemployment that you knew was a possibility when you purchased the policy (for example, if you purchased the policy after hearing through the grapevine that your company would be facing redundancies). Besides that, there are a few things that ASU won’t cover you for. For example, if you have to take time off work because of an elective, avoidable surgery (like a cosmetic surgery), you won’t be eligible to claim on your ASU policy. If your injury or illness is caused by self-harm, alcohol, or non-prescription drugs, you also won’t be able to make a claim. For a full list of policy exclusions, it’s a good idea to check your policy wording document, which you should have received when you purchased your policy.
An Initial Exclusion Period (otherwise known as an ‘IEP’) is the name given to the period right after policy purchase during which you can’t make a claim for unemployment. This period is usually 120 days, but it varies from policy to policy, so it’s worth checking your policy wording and policy schedule documents to see how long yours lasts.
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