Protecting your finances

Protecting your finances with Accident Sickness and Redundancy Insurance

Life is very uncertain, we never know if or when we will fall ill, lose our jobs or suffer an accident. It could well be that it will never happen, but do you want to take that chance? If you face involuntary unemployment, will you be prepared? Do you have savings to dip into or perhaps friends or relatives to help? Could you rely on State handouts?

If you answered ‘no’ to those questions, you may wish to seriously consider some peace of mind that could be offered by securing protection courtesy of Accident Sickness or Redundancy cover. These policies can offer a crucially valuable rescue package whenever one of life’s setbacks threatens financial disaster.

These policies are designed to pay out in the event of any one of the three involuntary incidents as the generic name implies. If you do not want cover for all three events, some providers will allow you to choose between the three, so for example you may elect to take Unemployment cover only, or Accident and Sickness as a stand-alone contract.

The benefits are tax free and are typically paid for up to a maximum period of 12 or 24 months, depending on your provider and your requirements and cover payout is not affected by other provision such as Company sick pay.

Accident Sickness and Redundancy policies can be linked to your mortgage or other debt and is often purchased on the back of a mortgage or loan transaction. However, it is worth remembering that you are not obligated to take such cover through the loan provider, indeed often it can be worthwhile shopping around and buying a stand-alone policy.

Benefits can be tailored to suit a particular purpose, for example insurance could be arranged to provide replacement general purpose income to help cover assorted household bills or could be put in place to cover a specific debt. If a policy is being taken to cover a mortgage, most providers will allow additional provision to be put in place to cover extra items such as life or general insurance premiums.

Deferred periods prior to a claim becoming payable do vary, thus it’s imperative that the ‘small print’ is pored over with a fine tooth comb! The initial qualifying period can be typically 30 to 60 days, but can differ if the policy is being taken at a different time, for example after a mortgage transaction.

Finally, a sobering thought perhaps, but the Chartered Institute for Personnel and Development (CIPD) forecasts that in 2009 600,000 workers face redundancy, the equivalent to 1600 a day.

Should you wish to receive additional information and a guide to outlay for such provision, please contact Keith Patrick our General Insurance Manager or call 01454 205120.