Date:5 December 2008 I Comments: 1 I Views:8,852

As the global financial crisis continues to erode consumer confidence and the prospect of facing redundancy looms ever closer for many UK workers you could be forgiven for thinking sales of income protection would increase.

Many factors however can curtail an immediate uptake of new protection policies.

For instance if the threat of redundancy is already known about cover is not likely to be offered and many Accident, Sickness & Unemployment (ASU) insurance policies also have a clause preventing any claims during the first 90 days.

This would indicate that unemployment cover is something people should consider having regardless of the state of the economy or the risk of potential job loss and not something to be purchased as an afterthought as well as combining the cover with savings designed to ‘take up the slack’ in the event of loss of earnings.

If ever there was a rainy day for which to save, this is surely it. (Isn’t hindsight a wonderful thing!)

Get a quote online for: Accident, Sickness & Unemployment Insurance

Recent developments and announcements made by government lately may also have a huge impact on the sales of ASU policies.

From January 2009 (according to Shelter) Income Support for Mortgage Interest (ISMI) will be available from 13 weeks (3 months) after a claim instead of the previous waiting period of 39 weeks (nearly 10 months). The maximum loan amount eligible for a claim is also increasing from £100,000 to £175,000.

ISMI is designed to pay just the interest part of a mortgage and people who are unemployed or on low incomes can get help.

On top of this mortgage lenders have been ordered to give borrowers in arrears three months before considering repossession.

So why would anyone take out an ASU policy which is designed to provide an income for up to 12 months if after just 3 months the Government will start taking care of the mortgage interest and in the preceding 3 months there is little or no risk of repossession?

The obvious reason is ‘what about the other bills and living expenses?’

Not to mention the fact that ASU will provide payment cover in the event of Accident & Sickness as well as Unemployment.

But is ASU the solution in the event of an accident or sickness when it only provides cover for 12 or 24 months? What if an accident were to render the policy holder permanently disabled?

That is where Permanent Health Insurance (PHI) comes in. PHI can provide mortgage payment protection for the full term of a mortgage to ensure the mortgage is paid off in the event that a policy holder will never be able to return to work as the result of an accident or sickness.

Get a quote online for: Accident, Sickness & Unemployment Insurance

Or: Request a call from a financial adviser – to discuss protection in more detail.


Category: Insurance