Accident, sickness and unemployment protection insurance is an innovative insurance that provides a tax free monthly sum in the event that you lose your income due to incapacity or involuntary redundancy and can be used to cover mortgage repayments, loan repayments or simply replace lost income.
To put it in to context, imagine what would happen if you suddenly were made redundant, without warning, or had an accident that prevented you from working. How would you continue meeting the cost of your outgoings, such as your rent or mortgage; loan repayments; grocery and utility bills etc? Relying on State benefits in circumstances such as this would not be a wise idea. Not only is there strict criteria that needs to be met before you can make a benefits claim, but the amount you would receive would, in most cases, not be enough to meet your monthly costs.
By having an accident, sickness and unemployment protection insurance policy in place, you would have the peace of mind of knowing that you would receive a monthly income that would help you maintain your bills and other costs until such time that you were back at work. This will definitely ease any financial anxiety at such a difficult time and will allow you to focus on recovering or seeking new employment rather than worrying about how you will pay your bills and keep a roof over your head.
How it covers your income, and your mortgage and loan repayments - Accident, sickness and unemployment protection insurance comes in three different types of cover, two of which are debt specific. You can get mortgage payment protection insurance that provides a monthly amount that will help towards your mortgage repayments as well as related costs (eg life and critical illness cover, home insurance etc).
Loan payment protection insurance deals with the specific debt of any loans by helping to meet the monthly repayments.
Finally, income payment protection insurance is not debt-specific but provides a general income that can be used for whatever purpose you wish, whether it be for fuel costs as you attend job interviews; for grocery costs or even hospital appointments while you are on the road to recovery.
Levels of protection
While accident, sickness and unemployment insurance provides comprehensive coverage against all events, there are also different levels of protection which means you can tailor make the policy to best suit your needs. You can opt to cover your finances against being made unemployed only. This would be Unemployment insurance. Or, you can opt to protect against the financial ramifications of incapacity only which would be Accident and Sickness cover or Incapacity Cover. The policy you choose will depend on what your employer provides in the event of long term illness or redundancy, so it is worth checking with them to see where your insurance policy would need to make up any financial deficit.
Accident, sickness and unemployment protection can be a financial lifeline should you suddenly lose your income and the good news is that it doesn’t have to cost a lot. By shopping around with the independent providers, you can get cover from as little as a few pounds a month for every $100 worth of protection needed, so it need not be cost prohibitive.