This guide about Income Protection Insurance (ASU) is designed to help you
decide if this is a suitable product for you. The questions and answers below should help you decide.
Ant Insurance is the trading name of FIUK.com Ltd. Authorised and regulated
by the Financial Services Authority. Registered in England & Wales No.
05096433. Registered Office 12 Littleworth Road, Esher, Surrey KT10 9PD.
What is Income Protection Insurance (ASU)?
Income Protection Insurance (ASU), the UK's lowest cost Income Payment Protection Insurance,
provides you with a monthly income if you become unable to work through accident,
sickness or unemployment giving you time to find a new job or recover from
illness. With our Income Protection Insurance no medicals are required and
individual habits such as smoking do not affect your premium or your eligibility.
The monthly benefit is a proportion of your gross income and varies between
providers. You may choose any proportion of
that amount to be paid in monthly installments for a length of time that is
determined by the benefit period you choose, usually to a maximum of 12 months
for any one claim. This tax free sum is paid directly to you to spend as you
wish and will allow you to continue to pay your monthly bills and provide
the essentials for yourself and your family until you are able to return to
work
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How does Income Protection Insurance (ASU) work?
Being unable to work, and the loss of income that incurs, is likely to affect
your lifestyle. Income Protection Insurance (ASU) is designed to replace your income
and reduce the negative effect of your loss of earnings.
Under an Income Protection Policy, you pay regular premiums, and subject to certain conditions, are paid a monthly
benefit if you are unable to work because of accident, sickness and unemployment.
Income Protection Insurance polices may be offered as Combined Accident, Sickness and
Unemployment Only and you may choose what suits you dependent on your own individual requirements.
Because income protection benefits are free of personal income tax, insurance
providers offering income protection will generally limit your benefit to
an amount less than your normal earnings, in our case up to up to 50% of your
gross income up to a maximum of £1000 as the remaining percentage is made up of either Statutory Sick Pay or Jobseekers Allowance.
Income Protection Policies have variable options that might include:
This allows you to choose at what point you
want the benefit payments to start after you are unable to work. If you have
savings or a good company scheme it may be possible to "defer" the payments
for 3, 6 or even 12 months. The longer the deferment period, the cheaper the
premium generally is. However in our case, payments are paid Back to Day 1
(see below) and your insurance premiums are also kept low.
Exclusion Periods (or Waiting Periods): This is the length of time, from the
start date of the policy you must wait, until you are able to claim for redundancy thsi can vary between 90 to 160 days. This
is different from deferred payments as it is a once only exclusion period and does not usually apply to Accident & Sickness claims.
Back to Day 1: Many income payment protection policies (including ours) now
offer the option of Back to Day 1 cover. This means you may make an insurance
claim after 31 days of loss income due to redundancy or accident or sickness and the payment will
be backdated to the first day.
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How do I know if I need Income Protection Insurance (ASU)?
First - calculate your savings or alternative income or additional income
Potential income sources will depend on your personal circumstances.
To find out if you might need Income Protection, ask yourself these 5 questions:
1.) What are my total monthly outgoings ?
Estimate the total expenditure of your monthly outgoings that should include
items such as mortgage or rent, loan repayments, utility bills, council tax,
food and petrol.
2.) For how long could I survive on my savings ?
You need to realistically estimate your total expenditure and then deduct
this from any savings you may have or any other income you may receive. Income
protection insurance may be unnecessary if you decide you could survive on
your savings.
3.) What are my benefits at work if I become sick or injured?
Your employer may continue to pay you an income (full sick pay benefits) for a limited time and this may therefore allow you to think about deferred payments however most employers will only pay Statutory Sick Pay. You should
check what arrangements your employer has made before arranging income protection
insurance.
4.) Will the state give me financial help?
State help will vary depending on your own individual circumstances but as
a general rule, if you are eligible i.e. you have paid sufficients National Insurance Contributions. the government will pay approximately £57.45 a week (over 25's) for JobSeekers Allowance but sometimes this is means-tested. You should check with your JobCentre Plus to see what your particular circumstances would be in the event of a claim.
5.) How quickly could I find work?
The answer to this will vary greatly dependent upon your occupation and where
you live.
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Why would I use Income Protection Insurance (ASU)?
Giving consideration to the effect on your income and your expenses, how do
you think that you would cope with the change in your circumstances if you
lost your income or were too ill to work? For how long could you cope? If
a shortfall is likely, you should consider taking out Short Term Income Protection Insurance
to protect your family and your lifestyle.
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When might I not need Income Protection Insurance (ASU)?
When you have sufficient income from other income sources
Income Protection Insurance (ASU) is not always required. If you are one of the
lucky few who have sufficient savings to tide them through a period of unemployment,
or you believe you could realistically adapt your lifestyle to take account
of your reduced income, then you may consider this Income Protection Insurance to be unnecessary.
Income protection insurance may be unnecessary if your employer has a sufficient
sickness benefit scheme but you could then reduce your premiums by looking at deferred payments to begin once your company benefits cease.
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If I do decide to buy Income Protection Insurance (ASU) what should I be looking
for?
You shoulc look for a policy offering the greatest choice and flexibility such as optional benefit periods, age banded premiums, Back to Day one cover and choice options should be available. We uniquely have a policy that will allow you to defer you accident and sickness claims whilst still keeping redundancy claims as Back to Day one are also important if you receive good company benefits and you can make a significant saving choosing this type of policy.
How long can I wait before I would need to claim?
Some income protection insurance policies provide deferred payments where
you will not receive benefits for a chosen number of months. This is useful if you had savings that could tide you through a short period before you would need to claim. This option can also be used to defer the number of months equal to your receipt of full sick pay from your employer. Once you then drop into receipt of statuatory sick pay you may then claim. Our income protection insurance has a qualifying period of 30 days
after which insurance payments are backdated to day 1.
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How long will I need to receive my monthly benefit for any one claim?
Your
choice of income protection insurance benefit period will be dependent upon your individual
circumstances but monthly benefit periods vary between 3, 6, 12 or 24 months for
any one individual claim or until you return to work, whichever come first.
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Should I get advice?
As a responsible income protection insurance provider, our site provides a
wide range of information on our products and we issue a 'Key Facts' document
to help you understand the main point of the income protection insurance policy.
However our offer of income protection insurance is non advisory so taking
independent financial advice may be helpful.
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What are the differences between Income Protection Insurance (ASU) and loan payment
protection insurance and mortgage payment protection insurance?
Covers a percentage of your income and is paid directly to you and you choose
how to spend it. It can provide for any loan or mortgage repayment, household
bills such as rent, credit cards, school fees, gas and electricity and removes
the need for costly separate cover. It requires just one policy for your whole
working life and the insurance premium will not increase according to age
for the duration of the policy.
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Mortgage Payment Protection Insurance (MPPI) and Loan Payment Protection (PPI):
Covers only your loan or your mortgage repayment. It does not make provision
for your extra monthly outgoings although some mortgage protection policies
will additionally cover associated mortgage insurance costs. Generally you would require
a new policy with each new mortgage or loan you obtain so pricing and acceptance
could then be affected over time by your health and your age.
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Ant Insurance is the trading name of FIUK.com Ltd. Authorised and regulated
by the Financial Services Authority. Registered in England & Wales No.
05096433. Registered Office 12 Littleworth Road, Esher, Surrey KT10 9PD
Welcome to Ant Insurance, Income Protection Insurance, Back to Day 1 Cover,
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