Product Feature: Accident, Sickness & Unemployment Insurance

Income Protection (IP) is the unsung hero of personal financial protection. Most of us would happily add the £20 per month tech cover to insure our mobile phones, but don't think to insure the most important thing of all, ourselves. IP provides you with a regular monthly income if you’re unable to work due to illness or injury. Think of it like private sick pay - you get a monthly replacement wage amount up to 65% of your gross salary, paid to you tax free, at the times when you need it most.

However, we are seeing an increase in declined applications by providers who are taking a stricter stance on things like BMI. Rather than leaving you uninsured, especially with a new mortgage payment on the horizon, there is a general insurance product by one of our providers that requires no medical underwriting (only a blanket exclusion for any pre-existing conditions). Here is the lowdown...

Accident, Sickness and Unemployment Insurance (ASU) helps protect your income if life throws curveballs. Specifically, if you can’t work because of an accident, illness, or if you’re involuntarily unemployed, this policy can step in to help you cover your mortgage (and potentially other outgoings).

Our provider has recently improved their offering, bringing unemployment cover back into their core policy so you get more comprehensive protection.

✅ Who’s Eligible — The Criteria

1. Age & Residency

   • You usually need to be between 18 and 65.

   • You must be a UK resident.

2. Employment Status

   • You need to be working at least 16 hours/week, every week.

   • If you’re on a fixed-term contract, you typically must have worked for the same employer for at least 12 months to qualify for the unemployment portion.

3. Cover Options

   • You can pick just accident & sickness.

   • Or go for the full ASU cover (accident, sickness and unemployment).

   • You also choose: how much benefit you need, how long you want potential payouts to last, and when your first payment would begin if a claim happens.

4. Deferred / Qualification Periods

   • For sickness, there’s a “qualification period” (often 30 days) before payments kick in.

   • There may be an “excess” option (i.e. how long you wait before getting the benefit) depending on what you pick.

5. Health & Pre-Existing Conditions

   • Pre-existing medical conditions may not be covered, unless you’ve been “symptom-free” or off treatment for a set time before starting the policy, usually 12 months.

   • Some exclusions apply, especially for conditions known before the policy began.

6. Unemployment Claim Requirements

   • If you're claiming unemployment, you may be required to register as unemployed with the Department for Work and Pensions (DWP).

   • For fixed-term contracts, non-renewal may be covered if you meet the criteria.

🌟 What Are the Benefits of ASU Insurance?

1. Income Replacement - If you can’t work, you get a monthly tax-free benefit to help cover your mortgage repayments and possibly other costs.

2. Flexible Benefit Levels

   • You can insure up to £3,000 a month or up to 75% of your gross monthly income, whichever is lower.

   • You also have the option to boost your monthly benefit by up to 33% to help with other commitments (e.g., bills, credit cards) during a claim.

3. Benefit Period

   • For accident or sickness, you can get cover for up to 12 or 24 months.

   • For unemployment, your policy may pay out for up to 12 months.

4. Additional Support Services

   • Back-to-Work Service: If you lose your job, the provider can help with CV writing and interview support.

   • Counselling: You also get access to confidential telephone counselling if you need emotional support.

   • Employment Legal Protection: If there’s a dispute about your job, you may have legal help (health assistance can be included).

5. Tax Treatment

   • Payments from this type of policy are generally tax-free, since premiums are paid from taxed income.

6. Carer Cover

   • If you have to leave work to care for a close family member, this policy may still support you.

⚠️ Things to Be Careful About

• Pre-Existing Conditions: Not everything is covered — check whether health issues you already have are excluded or limited.

• Qualification Period: There’s a waiting time (e.g., 30 days) before sickness benefits start. However, you can opt to have your benefit payments backdated to when you stopped work.

• Fixed-Term Contract Risks: If you’re on a short-term contract and it’s not renewed, you must meet certain criteria to claim unemployment.

• Cover Choices Matter: If you choose only accident & sickness and later become unemployed, you may not be covered for that.

• Premium Cost: More cover or more flexibility = higher premium; make sure you’re only paying for what you need.

👍 Should You Consider It?

If you’re a homeowner (or have financial commitments tied to your income), ASU cover is a solid safety net. It’s especially useful if:

• You want to protect your mortgage (or monthly outgoings)

• You’re concerned about illness or injury

• Redundancy is a realistic risk for you

• You’d appreciate support to get back into work

• You can't get standard Income Protection

On the other hand, if your job is super secure, or you already have a large emergency fund, you might weigh whether you need all of the options — or a simpler, cheaper policy.

✅ Final Thoughts

Life is unpredictable — illness, accidents, unemployment can all happen when you least expect them. ASU (Accident, Sickness & Unemployment) insurance is a flexible way to make sure your biggest financial commitments (like your mortgage) don’t crash down on you if things go wrong.

This cover is only available within 30 days of you completing on a new mortgage (or remortgage), so if you've had other insurance declined and still want some sort of cover, ASU is a quick and safe option to consider.