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Income Protection Cover
Accident, Sickness and Unemployment (ASU) Cover?

Income Protection Cover is a long term policy that provides cover for health related work absence and not redundancy. In the event of such absence, you will receive a tax-free monthly income that will be payable until your desired retirement age. Income Protection Policies can be claimed on multiple times (even for the same illness/disability) and if you return to work at a lower salary following incapacity, you can claim a proportional amount of the policy.

Income Protection Policies are not linked to mortgage payments and the benefits are paid as tax-free general income, which can then be used for mortgage/loan payments, food, bills, etc. If you receive full sick pay from your employer, then you will not be able to claim on the policy until all of you sick pay has been used; proportional amounts may be paid if you only receive half or quarter sick pay. Income Protection Premiums are calculated based on your age, occupation, health, amount/level of cover and your selected retirement age/deferment period.

When applying for Income Protection Cover, there is a much stricter underwriting procedure to go through than with ASU. This means that upon application, they will ask more personal and medical questions, they may contact your doctors prior to setting up the policy and for the larger cases may request you to attend a small medical screening. The main advantage of this is that you know that full disclosure is being made by your GP and therefore the chances of a claim being turned down are minimal. Due to this, it may take to longer to set up an Income Protection Policy than an ASU Policy.

Accident, Sickness and Unemployment (ASU) Policies provide cover for a shorter term than Income Protection Cover and therefore can only be claimed for a maximum of 1-2 years, depending upon the company. ASU Policies can have redundancy cover incorporated for employed persons only, meaning that you can claim on the policy should you be made redundant from your occupation. ASU policies can either be linked directly to mortgage payments, loan payments or general bills/income. The benefit for Accident, Sickness and Unemployment Policies can be claimed on top of sick pay from your employer in the event of an Accident or Sickness.

Income Protection vs ASU Policies
Income Protection ASU Cover
Definition of Cover Disability (Accident) and Sickness. Disability (Accident), Sickness and Redundancy.
Level of Underwriting (i.e. setting up a policy) Longer and Stricter, may need doctor's reports and a medical, however chance of paying a claim is very high. Quicker, however chance of paying a claim is not quite as high.
Time to Wait Before Claiming Options of 4, 8, 13, 26 or 52 weeks are available. Tend to have a waiting period of 30, 60 or 90 days, however claims can often be backdated to day 1.
Can You Claim on Top of Employer's Sick Pay? Not for full sick pay, but proportional amounts may be paid if not claiming full sick pay. Yes
How Long Can You Claim For? Until your selected retirement age of between 50 and 70. A maximum of 1-2 years dependant upon company.
If Returning to Work at a Lower Salary Can You Still Claim? You can claim a proportional benefit. No proportional benefits can be claimed.
What Can the Money be Used For? Anything. There are specific policies for mortgage payments, loan payments and general income.

All the information above is correct at time of publishing from our panel of providers. (November 2012) accepts no responsibility for the information provided above as it is meant purely as a guide, we recommend that you read your key features and policy document carefully.

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