Have you ever broken a bone, torn a muscle or suffered a minor or even major injury or accident?
Have you ever fallen ill whether that is a serious condition or a minor problem, and ended up being laid up for a while?
Did either of the above result in you needing to take time off work, or did this result in you losing income, if so then an accident and sickness income protection policy could and would have helped you. It is an insurance policy that you pay monthly and if you are unfortunately injured or become sick and need to take time off work it will pay you either weekly or monthly until you are able to return to work.
It helps you maintain your finances, pay your bills and put food on the table when these situations occur.
What are your other options; borrow money from friends or family, get a loan or credit card to tide you over or rely on the government for disability benefit payments. Getting yourself into debt should not be an option worth considering when comparing against protecting yourself through an easy to purchase and simple to understand Accident and Sickness income protection policy.
This policy will give you that much need breathing space to keep your lifestyle on track should you find yourself laid up.
Accident and Sickness Income Protection Insurance is a personal individual insurance policy that is linked to you, your health and your income.
As with all insurance it covers you against the unknown, it provides a financial safety net should you fall ill or suffer an accident that keeps you out of work. This generally results in you losing much needed income which you need to maintain your lifestyle, bills and outgoings.
It is only available to people who are working, whether that is employed or self-employed. If you are working and earning taxable income you can purchase Accident and Sickness income protection.
It will provide protection for injuries, illness’s and accidents that are not already known about, or otherwise known as pre-existing medical conditions. It is linked to the income that you earn, and should you ever need to claim the insurer will pay you a percentage of that income for a period of time chosen by you. It is available throughout the UK online and offline via insurers, brokers and financial advisors. Accident and Sickness insurance usually forms part of discussions and consideration should you take on a new commitment or outgoing, like a mortgage, renting a property or starting a new job, getting married, having children, or if you move in with a partner or maybe because you are reliant on your income to pay your bills.
Accident and Sickness insurance is a comprehensive insurance policy that covers you against unforeseen accidents, injuries or illnesses that keep you out of work.
It doesn’t matter where the accident happens, in work out of work, on holiday or abroad in another country it really does not matter. As long as you are unable to work due to the injury, accident or sickness and it is not a pre-existing medical condition then subject to usual checks you can make a claim.
The policy doesn’t specify the medical conditions that you are covered for, in fact it specifies the conditions that you are not covered for. For instance, pre-existing medical conditions are not permitted, drink or drug related issues are not covered, self-harm or elective cosmetic surgery are also not covered.
Outside of the above whether it is a minor or major accident or illness and regardless of how long you will be out of work for, as long as you are unable to work and this can be verified by your doctor, GP or hospital consultant your Accident and Sickness policy will, subject to the usual checks provide you with the much needed protection.
Firstly, as with all insurance policies you will need to make sure you meet the eligibility criteria, this may differ between insurers but essentially, age, location, medical history, the industry you work in the job role you perform or whether you are employed or self-employed cover most of the main points.
The income that you declare either via your employer or via HMRC in your tax return also forms the basis of your ability to insure yourself and your income.
Once you have established you meet the qualifying criteria to purchase the policy you will then need to make sure you can make a claim on the policy should you need to, this is extremely important and not often discussed or made clear.
As with all insurance policies making a claim is the reason you are purchasing cover, so making sure you can provide the insurer with all the required information and documentation should you ever be in a position to claim is just as important.
Providing documents to confirm your identity, where you live , proof of your income, payslips, bank statements, business accounts, tax returns and also verification from your GP, hospital or consultant that you are signed off work, are all check points the claims handlers will be looking to obtain. They will also where applicable speak with your employer to confirm.
Are you over 18 or below 65, are you employed, self-employed or a contract worker?
Do you have monthly bills to pay, like a mortgage, rent, credit cards, personal loans, car finance or debt management plans?
What do you spend on food shopping each week, gas, electricity, water, mobile phone contracts, sky subscriptions, Netflix, Spotify, TV licence, car insurance, dental plans, school fees, clothes, restaurants, holidays….?
As you can see the list is endless and can go on and on, so only you can decide on whether you need Accident and Sickness insurance but if your employer does not pay sick pay or maybe they only pay very little which can in experience be the norm. If you are the only person bringing in a salary to the household then you should seriously consider protecting that income.
Ask yourself how you are going to pay your bills should you be out of work for long or short period of time. The current statutory sick pay is £94.25 per week for a maximum of 28 weeks, this will not go far should something happen.
So perhaps after considering the above you can ask yourself again to do you need Accident and Sickness insurance?
There are many different options for you to choose when purchasing Accident & Sickness Income protection.
The main choices are based around how quickly you would like the claim to be paid and for how long you would like your claim to be paid to you. To give an example, you can choose to be paid after 3 days, 1 week, 2 weeks 1 month 2 months 3 months, 6 months or even after 12 months.
You can also choose for the claim to be paid for 12 months, 24 months, or ongoing until age 70
Obviously the quicker you would like to receive payment and the longer you would like it paid for effect how much the covers costs each month.
Other choices are linked to your medical history, you can choose to look at a policy that requires full up front medical underwriting, the insurer will then understand everything about you before they offer you cover, they can then exclude certain medical conditions or increase the cost dependent on your situation.
Other Accident and Sickness policies allow you to purchase without any medical underwriting but offer you cover on the understanding that you cannot make a claim against any pre-existing medical conditions you have suffered in the last 12 or 24 months.
Again, this really does depend on your own personal circumstances. Accident and Sickness Income protection is based on you, your income, your health and your sports, hobbies and pastimes.
To be eligible to purchase you must be over 18 and below age 65. You also need to be working and earning income, the policy is income protection therefore if you are not earning income you have no income to cover.
You also need to be a UK resident and paying UK tax and be able to verify these points should you ever need to claim.
Once this eligibility is established then the insurer will look at underwriting the finer points before you can obtain cover. Your job is important, working in an office is not as risky as working underground with heavy machinery. They will also want to understand your health, your height, weight, any injuries or illness’s that you may have had previously.
For instance; if you have had or suffer from a major medical condition it may prevent you obtaining cover with certain insurers.
Finally, they want to know about your hobbies, sports or pastimes, do you ride horses, box or compete in martial arts, do you have a boat and sail across the channel regularly. Do you dive, rock climb or spend your weekends mountaineering, this obviously will impact the decision some insurers will make about insuring you as the risk of injury or accident is greater.
You can claim immediately on an Accident and Sickness income protection policy. If your policy is placed on risk today and you are unfortunate enough to suffer an injury or become ill tomorrow, then subject to the usual checks your claim will be paid.
However, when a claim is paid it is dependent on how quickly you chose when you purchased the policy.
This period which needs to elapse before the claim is paid is known as the excess, deferment or waiting period. You can choose your excess to suit your own personal requirements or situation.
If you do not receive sick pay from your employer or you are self-employed then you may wish to choose for your cover to start immediately or after 1 week of you being signed off work.
However, if you receive sick pay for one or two months from your employer or of you have some savings to fall back on you can choose to defer your claim starting by this time.
It is completely flexible and as said dependent on your own financial situation.
The general rule to remember is the quicker you would like your claim to be paid ,the more expensive your Accident and Sickness income protection policy cost monthly.
The cost of an Accident and Sickness income protection policy varies greatly dependent on many different factors, your age, the job you do, the industry you work in, your medical history, your height your weight, do you smoke, do you travel to remote countries or regions within a country. Do you participate in any dangerous sports or hobbies?
All the above have an effect on the price you may pay for an Accident and Sickness policy.
It is also dependent on how quickly you require your claim to be paid and for how long it will be paid for. The insurer also offers a choice for you to guarantee the premiums you pay for the life of the policy, or for premiums to increase annually on your birthday due to age.
You can also choose to index link your policy, essentially allowing your cover to be linked to the retail pricing index which moves in line with inflation. This means your cover will rise annually in line with inflation and so will the monthly cost of the policy.
All of the above have direct consequences on the cost of an Accident and Sickness protection policy, the next thing to do is research the product online or speak to a specialist protection consultant who will talk you through all your options and send you information on suitable policies that meet your own personal circumstances.
To compare Accident and Sickness income protection policies, you first need to collate some basic information about yourself. Your taxable declared income for the last 3 years, how much time you have had off work in the last 5 years and what was the reasons behind you taking time off work. If you are taking any medication currently or have done previously will all be good information to have to hand.
You will also need to know how much your outgoings are monthly, your major and minor bills, any savings you may have are also worth listing.
The more information you have about yourself and your income and expenditure will help you understand where your pressure points are should you get signed off work. You will also need to consider what would happen should you not be able to return to work again. How would this effect your life and what income you would need each month to cover your main bills.
Once you have this information you can go online or speak to a specialist protection consultant who will talk you through the options that are available to you.
As with any important purchase, education and understanding of the product is essential, the more information you have and the more questions you ask will make it easier to compare quotes and obtain the most suitable Accident and Sickness policy for your circumstances.
Also, the most important thing to check before you give any information either online or over the phone is that the company is authorised and regulated by the Financial Conduct Authority or FCA. It is also prudent to check the FCA register to confirm the company is authorised to give information on Accident and Sickness income protection products.
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