Accident and Sickness Insurance

What is accident and sickness insurance?

Accident and sickness insurance, also known as accident and sickness protection cover, is a type of income protection policy designed to help cover your living expenses if you experience illness or have an accident that leaves you unable to work for a short or indefinite period of time.

It provides up to 70% of your gross monthly salary every month, preventing you from falling into arrears and maintaining your standard of living. Unlike mortgage payment protection insurance, which only covers your mortgage repayments, accident and sickness insurance can be used to meet all sorts of bills, from utilities, phone bills and TV contracts to food shopping and family activities.

What types of accident and sickness insurance are available?

Short-term income protection:

This type of policy covers you if you’re unable to work for a shorter length of time, usually 6 to 12 months, although some policies offer cover for up to two years. Short-term policies are affordable and easy to buy but the cover is not as comprehensive as longer-term options.

Long-term income protection:

Long-term sickness protection covers you if you’re unable to return to work for more than a year and, in many cases, stays in place until retirement. As a result, the premiums are more expensive than with a short-term policy, but you have peace of mind that the bills will continue to be paid no matter how long you are off work.

Accident, sickness and unemployment insurance:

Accident and sickness insurance policies provide cover solely if you're unwell and unable to work. Another option is accident, sickness and unemployment (ASU) cover, which also covers you in the event you lose your job through no fault of your own. These comprehensive policies are popular, although you can also buy stand-alone redundancy insurance too.

How does accident and sickness insurance work?

As with most types of insurance, you choose the right policy for your circumstances and pay a monthly premium. If you then become ill or have an accident that leaves you unable to work for a length of time, you will need to get in touch with your accident and sickness protection policy provider and make a claim.

Once your claim is accepted and the predetermined deferred period (also known as waiting period) is over, you will receive a monthly payment of up to 70% of your gross salary (before taxes) directly into your bank account, which can be used to pay any bills or expenses needed.

What does accident and sickness insurance cover?

Accident and sickness insurance is designed to provide you with financial support in the eventuality you can’t work due to an injury or sickness. It will typically cover a percentage of your income, normally about 70%. Some policies might also offer additional support like rehabilitation and support services aimed at helping you get back to work.

It's important to thoroughly review the policy document to understand the specific terms, conditions, and exclusions.

What is not covered by accident and sickness insurance?

• Pre-existing conditions: Many policies will not cover illnesses or injuries that are related to pre-existing medical conditions known before the policy was taken out.
• Redundancy or dismissal: If you are let go from your job and not due to an illness that has made you unable to work.
• Self-Inflicted Injuries: Injuries that are the result of self-harm, attempted suicide, or injuries incurred as a result of drug or alcohol abuse are typically not covered.
• Mental health: Some policies may have exclusions or limitations for mental health issues, though this can vary significantly between providers.

Do I need accident and sickness insurance?

Like with most insurances, accident and sickness protection insurance is designed to help you meet your financial obligation in the eventuality you are unable to work.Whether this is the right cover for you, will depend on your risk of illness or injury based on your lifestyle, health, and occupation. Jobs with higher physical risks may increase the importance of having insurance.

Moreover, if you have substantial savings or an emergency fund that could cover your living expenses for an extended period, you might feel comfortable without additional insurance. You need to assess your personal circumstances to decide whether this is the right cover for you. Alternatively, you can talk to one of our experts to help you find the best income protection cover for your needs.

Am I eligible for accident and sickness cover?

In order to be eligible for accident and sickness insurance you will need the following:

• Stable employment for a specific period of time
• Not under immediate risk of losing your job
• Full-time employment is usually a prerequisite (although some policies may cover part-time workers)

To determine eligibility and coverage extent, you’ll also need to provide

• Health status
• Employment history

Can I get accident and sickness insurance if I’m self-employed?

Yes, if you can get accident and sickness cover if you are self-employed. In fact, this insurance is seriously worth considering as you most likely won’t have access to sick pay or employer benefits in the eventuality of illness.

An accident and sickness policy can provide you with a financial safety net and help manage expenses during the recovery periods.

How much accident and sickness cover do I need?

To calculate how much accident and sickness cover you need, write down all of your monthly outgoings and mark down your essentials.

• Mortgage or rent payment
• Household bills
• Groceries
• Memberships
• Car and any associated costs
• Any other financial commitments

Aim for a coverage that matches a significant portion of your gross income (usually up to 50-70%), ensuring it covers your essential costs. You should also factor in any savings or other income sources that could support you during the recovery period. This may allow you to bring down your monthly premium costs.

If you’d like some guidance on what premium could work for you - speak to one of our brokers.

What affects my accident and sickness insurance policy?

Factors that can affect your accident and sickness insurance policy are:

• Your occupation: understand what your risk of injury is
• Income: to help understand the amount of coverage you may need
• Health status: if you have any pre-existing conditions may affect eligibility or premiums.
• Age: older applicants may face higher premiums
• Lifestyle habits: smokers may need to pay more
• Policy terms: coverage amount and deferred period (also known as waiting period)

Accident and sickness insurance FAQs:

How long will accident and sickness insurance pay out for?

The payout duration for accident and sickness insurance varies by policy. Some offer short-term coverage, typically up to 12 months, suitable for temporary incapacity. Long-term policies may provide benefits until you can return to work, reach retirement age, or for a set number of years.

Is Accident and sickness insurance the same as PPI?

Payment protection insurance (PPI) safeguards your ability to make specific payments if you're unable to do so. In contrast, accident and sickness insurance provides a portion of your gross salary (generally between 50%-70%) if you're unable to work due to illness or injury. PPI benefits are designated for specific expenses, while funds from accident and sickness insurance can be used at your discretion

Does accident and sickness Insurance cover illness?

Yes, accident and sickness Insurance does cover illness. It is designed to provide financial support if you are unable to work due to either accidental injury or sickness, including a wide range of illnesses that impact your ability to earn an income.

How does accident and sickness insurance affect my sick pay?

Accident and sickness insurance supplements your income if you're unable to work due to illness or injury. It doesn't directly affect your employer-provided sick pay but acts as an additional financial safety net. If you receive sick pay from your employer, accident and sickness insurance can complement this by covering a portion of your income that sick pay may not fully replace, ensuring you maintain financial stability during your recovery period.

Does accident and sickness insurance cover mortgage payments?

Accident and sickness insurance primarily provides a portion of your income when you're unable to work due to illness or injury, rather than directly covering mortgage payments. However, the benefit you receive from accident and sickness insurance can be used to help cover your mortgage payments or any other financial obligations you have