Accident, Sickness and Unemployment Insurance

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.