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.

What is 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 result 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 cover is called ‘ASU’ for accident sickness & unemployment insurance. It is sometimes also referred to as ‘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 benefit 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 might generally vary among providers.

A typical insurance policy may provide protection for up to 12 months. As it runs for 12 months, it is generally considered to be a short-term policy.

The replacement income may be used by you for any reasons which may include meeting essential outgoings.

What if a policy is needed for a longer period?

It is understandable that in some cases, sickness or an accident may mean that you are unable to return to work for extended periods.

To meet this situation, you might wish to consider long-term income protection policies for sickness and accidents. The longer term policy usually continue paying benefits up to your retirement age, if needed. Typically this longer term protection goes up to:

· 65% of your annual personal taxable income up to a ceiling of £60,000 and then 40% of any of your income that is above this level.

You may choose to include extended insurance into the shorter term insurance policy if you wish. Do note that unemployment is not covered by the longer term protection.

What requirements are there for eligibility?

Typically to be able to take out unemployment sickness insurance you have to meet certain requirements, these are:

· to be in permanent employment;

· state any medical conditions which are classed as being pre-existing;

· to declare if you work in a highly hazardous occupation or participate in dangerous sports.

What requirements are there to make a claim?

If you are claiming on an unemployment sickness insurance policy, you may be asked to show written evidence that the cause was beyond your control – such as redundancy. In other words usually 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 returns to education;

· certain conditions of being dismissed.

For accident claims you may be asked to produce evidence as to the cause of the accident. For both accident and sickness claims, you typically might be asked for an independent medical or other forms of medical assessment.

What are the next steps?

Unemployment sickness insurance might typically prove exceptionally important to you and your family. It may be worth taking some advice on options and possibilities to help you find a package that meets your needs.