Accident, Sickness & Unemployment (ASU) Insurance

What is ASU insurance?

ASU insurance is just one of many forms of protection a borrower should seriously consider when arranging a mortgage. It can also be referred to as Mortgage Payment Protection Insurance (MPPI). It provides you with an income to meet your outgoings in the event that you are unable to work through illness, accident or unemployment.

It usually pays out a monthly benefit to cover your mortgage and other related costs for up to a year or two, or until you return to work, which ever happens first. It is expected that within that period you will have found other employment or recovered from illness or injury.

Why do I need ASU insurance?

ASU/MPPI is not compulsory, although it can be a condition of some loans. Anyone with a mortgage, especially people who may have stretched themselves financially, should seriously consider setting up a policy.

The effect that the incapacity to work, due to an accident, or illness, or job loss, can have on your family and family home can be devastating.

The State benefits for anyone in this situation are limited. They are also means tested, so if you have savings you would be expected to use them before first. Unfortunately nowadays, you are not even likely to get any assistance from the State until you have been absent from work for at least nine months.

Therefore, if you do not have a considerable ‘emergency fund’ this insurance is essential.

What are the typical options available?

Some policies will allow you to choose whether you want to receive benefits for accident & sickness only, unemployment only or all three.

You may choose the amount of benefit you would like to receive, although there are some limits on the maximum amount.

If I made a claim would the policy pay out immediately?

It's worth bearing in mind that most ASU/MPPI insurers can provide different levels of monthly premiums depending on the level of cover you require, especially regarding the "waiting period". This is the time you have to wait before you start to receive benefits from the ASU/MPPI policy after you have become ill, had an accident or become unemployed. The waiting period is usually expressed as either 30, 60 or 90 days and the longer the waiting period the lower the premiums.

Alternatively some ASU/MPPI policies have a waiting period after which time the claim is paid in full. With a 30 day waiting period, on the 31st day of unemployment or disability the claim is back dated to day 1 & paid in full.

Are there any exclusions?

Exclusions vary from policy to policy so it is vital that you understand the instances when you will not be covered. The exclusions will be listed in the policy details which you should read carefully.

The main instances when you will not be covered are deliberate self injury, riding on a motorcycle, dangerous sports or occupations, working as a professional sports person, or any injury or condition related to normal pregnancy, stress, backache or which you had prior to your application for cover, AIDS related conditions, conditions due to drug and alcohol abuse or your criminal activity.

If you have also selected unemployment cover, you will not be covered if you knew or had reason to believe you might become unemployed, if your work is seasonal or temporary or you accept voluntary unemployment. If you are on a contract you can still qualify for unemployment cover if you satisfy certain conditions which are contained in the full policy details. You will not be covered for any sickness which occurs during the first 60 days of your policy. You will not be covered for any unemployment which occurs during the first 180 days of your policy.

For further information and to obtain a personalised quotation please contact us.


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