Unemployment sickness insurance
No insurance can guarantee either your job or your health but unemployment sickness insurance may be able to offer you a financial lifejacket in the event that misfortune strikes you and your family.
Benefit of unemployment sickness insurance?
There are three things that might arise from nowhere and which may rob you of your income at a moment’s notice:
· unemployment through involuntary redundancy etc;
· non-trivial sickness;
· accidents resulting in serious after-effects.
That’s why a package of insurance specifically designed to cover these circumstances and provide you with income should you lose your normal source, may make very good sense.
This type of insurance is called ‘ASU’ for accident sickness & unemployment insurance. Providers might also use the term income protection insurance.
Ofcourse, policy features and benefits almost certainly vary among providers, so the following information should be used as a guide only.
How does ASU / income protection help you?
If you were to become victim to one of the event covered in the policy you are typically able to claim a replacement income which may be up to £1500 each month or around 60% of the taxable gross income you used to bring home – whichever is the lesser. This figure may vary among providers.
This can typically run for up to 12 months or it would stop if within that period you were able to either return to work or found alternative income. As it runs for 12 months, it is typically considered to be a short-term policy.
The income can be used for whatever purposes you wish such as paying bills or covering regular repayments etc.
What if insurance is needed for a longer period?
You may of course suffer an illness that lasts a great deal longer than a 12 month period and of course the same may apply to accidents.
To meet this situation, may choose to consider long-term income protection policies for sickness and accidents. This protection may run until you are fit to return to work or have reached retirement age. Typically this form of insurance goes up to:
· 65% of your income per year personal taxable income up to a ceiling of £60,000 and then 40% of any of your income that is above this level.
This form of extended protection can be added to the short-term ASU protection. Do note that unemployment is not covered by the longer term cover
What is required for eligibility?
Typically to be able to take out unemployment sickness insurance you have to meet certain requirements, these are:
· to be in steady employment permanently:
· to declare any existing serious medical conditions;
· to declare if you work in a very hazardous occupation or participate in dangerous sports.
What requirements are there to make a claim?
If you are claiming after taking out an unemployment sickness insurance policy, you may be asked to show written evidence that the cause was beyond your control – such as being made redundant. In other words you typically find claims will not be accepted for:
· if you were to resign from work or offered voluntary redundancy;
· career breaks, extended maternity breaks, study leave or you go back to college or university;
· some types of dismissal.
For accident claims you may be asked to produce evidence as to the cause of the accident. For both accident and sickness claims, you you generally may be asked for an independent medical or other forms of medical assessment.
What other steps need to be taken?
Unemployment sickness insurance may typically prove exceptionally important to you and your family. Therefore with this in mind you may wish to take advice and help when choosing the most suitable form of protection.
