To answer the question, ‘what is an ASU policy likely to cover’ we should perhaps start by revealing that ASU, stands for accident sickness and unemployment. From this you may deduce that ASU is a type of insurance which will protect you in the event that you are unable to work as a result of an accident, illness, or unexpected redundancy.

Typically, an ASU policy is likely to cover certain specific payments that you are obligated to pay. It may be set up to cover mortgage interest or rental payments on your home, for example. It is also usually limited to pay out for one or two years only. There are various restrictions with this type of policy and it should not be confused with short or long term income protection, which while this type of policy does not cover redundancy, does provide more comprehensive protection against ill health and incapacitation.

In this article we will look at this type of policy, what is and is not covered, how it can help with a gradual return to work, dangerous jobs and how they affect your ability to take out cover, and how ASU works in the case of redundancy.

This article can only provide a basic guide to the subject and you should take expert advice before proceeding with any insurance policy.

What is unlikely to be covered by an ASU policy?

Having looked briefly at what an ASU policy is likely to cover, it is worth considering some situations in which you may not be covered. ASU would naturally not be expected to cover you for a pre-existing condition, or for a redundancy which was already expected including anticipated within the company whether you are affect or not, nor for any kind of deliberate injury.  They also tend to exclude any mental health or back related issues regardless of if you have suffered with this in the past.

ASU policies are usually set up to cover specific expenditure, and limited in the time it pays out for, generally 12 months, so might not pay enough to keep up non-essential costs. The cover is also usually only intended to run for a specific period of time to allow you to cover bills while you rearrange your finances. It is important to review all the terms and conditions of the specific policy before proceeding to ensure that you have provided yourself with the right type and level of cover.

Dangerous jobs that affect ASU policies

Some jobs are more dangerous than others, and some of these may come as a surprise. Of course those who work in dangerous occupations will find they are likely to pay a higher premium for the same level of cover. However, these are the very people who are most likely to need that cover so not getting ASU may be a false economy.

Many occupations which are obviously dangerous, such as the military, or police have some degree of contractual protection, although it is advisable to check the details as many do not cover you in all eventualities. Others, such as carpenters, refuse collectors, agricultural workers, or abattoir employees (all of which are in the top twenty most dangerous occupations) often have little or no contractual protection. Simply having a dangerous job does not automatically mean that you cannot get cover; indeed, it makes getting cover all the more essential, but it is important when considering an ASU policy to be honest about your occupation so that you are properly insured. 

Providing cover due to loss of job

Most people’s savings are not adequate to cover them for very long in the event of loss of earnings, and in the present economic climate the possibility of redundancy is an additional factor to consider. Companies merge or restructure or are forced to downsize. A few even end up going out of business, leaving their workers without a job. In many cases redundancy payments can ease the financial burden but only for those who have been with the company for a long period, and even then, not always if the company is insolvent. An ASU policy can provide protection against loss of earning due to redundancy allowing you time to find new employment without defaulting on essential repayments or bills.

Summary of 'what is an ASU policy likely to cover?'

ASU can help with essential bill payments and/or interest repayments while you recover from any form of illness, or accident, as well as giving you protection should you lose your job due to redundancy, but usually only for a fixed time period, typically 12 months.

There are limitations to this type of policy especially for unemployment cover and if you are looking to protect against redundancy then it would be appropriate to speak to an adviser. For example, it will cover the self-employed against redundancy but only if your company ceases trading, however, if you are a director then you may not be eligible. This is just one example with regards to the factors which effect eligibility for the policy and the ability to make a claim.

This article is only intended as a brief guide to the subject and you should take expert advice on your specific circumstances before making any final decisions.

Hazardous occupations and their effect on Income Protection

Do you have a high risk occupation?
Prev article

When do I need Income Protection?

Income Protection may be needed far more than you'd think...
Next article