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Accident Sickness & Unemployment (ASU)

Accident Sickness & Unemployment (ASU)

Accident, sickness and unemployment (ASU) insurance is usually a short-term income protection policy that pays you a tax-free income equivalent to a proportion of your salary for typically up to 12 months should you be unable to work due to accident, sickness or involuntary redundancy.  

 

The policy is designed to provide an income when you need to take extended time off work because of illness or injury to avoid having to otherwise rely on savings, or sick pay until you are able to get back on your feet. 

There is usually a deferred period before payment. This is the time between going off sick or losing your job and being paid your insurance benefits. So, for example, your income protection payments could commence once you have been off work for, say, six weeks.  

The longer your deferred period, the cheaper your monthly premiums are likely to be. 

ASU is not tied to a particular debt or mortgage and should not be confused with payment protection insurance (PPI) which typically pays a particular debt, like a credit card in the event of accident, sickness or unemployment.  

ASU should also not be confused with mortgage payment protection (MPP) which like PPI pays a particular debt in the event of you becoming sick or unemployed etc., in this case, the debt specifically being your mortgage.  

Accident sickness and unemployment policies do not cover you for  

a) resigning from your employment; or 

b) being dismissed from your employment; or 

c) pre-diagnosed illnesses.

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