An introduction to Short Term Sickness and Unemployment cover

Payment protection insurance (otherwise known as short term income protection) and mortgage payment protection cover, are both different forms of accident, sickness and unemployment cover, more commonly known ASU or Short Term Sickness Protection.

This kind of policy is particularly useful if you are concerned about whether or not you could cope financially in the event that you lost your job through redundancy or ill health.

You can take out an short term sickness and unemployment policy that is specific to a debt so that repayments will continue to be made in the event that you lose your income through an accident, sickness or after becoming unemployed.

Bear in mind that most short term sickness insurance policies are time limited, so they will only pay out for a set period. This can range from a few months to a couple of years, although if you decide instead to opt for a broader income protection policy, this will continue to pay you a monthly amount until you either recover or until the end of the policy term. Policies also carry certain restrictions. For example, you may not be covered if you are already at risk of unemployment when you take out a policy.

The longer your cover lasts, the more expensive it is likely to be.


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What is a Short Term Sickness & Unemployment policy likely to cover?

This type of policy is designed to provide you with financial protection in the event you are unable to continue working because:

  • You have lost your job through no fault of your own;
  • You become ill and are too sick to work;
  • You are injured and unable to work.

You will typically receive a proportion of your income for up to 12 months which can then be used to help cover your monthly outgoings.

This is different to Mortgage Payment Protection Insurance (MPPI) and Payment Protection Insurance (PPI) which will only cover your repayments on a specific debt (mortgage or loan, for example).

What is unlikely to be covered by Short Term Sickness & Unemployment insurance?

As with any form of insurance, when you buy an Short Term Sickness policy it’s important to find out whether any exclusions apply to your cover.

First and foremost, if you have any reason to suspect that you might be about to lose your job it is vital to be aware that any Short Term Sickness policy you buy may be invalid.

Insurance companies are careful to investigate customers’ circumstances before authorising payouts, and if it seems that you have deliberately tried to insure yourself in anticipation of redundancy you will probably find it impossible to claim.

Most Short Term policies come with a waiting period designed to prevent fraudulent claims. This might mean that if you are unable to work within a few months of taking out an Short Term Sickness & Unemployment policy you won’t be eligible for a payout, even if you were 100% honest with your insurer when setting up your cover.

If you are able to make an Short Term Sickness claim, it’s likely you will have to wait at least a month before receiving a payout. The waiting period that comes with your policy is something else to look out for when researching the products on offer from different providers.

Meanwhile, if you are aged over 65, are self-employed or have been in your job less than six months, you may also find that it’s harder to find Short Term Sickness & Unemployment cover.

Finally, don’t forget to find out which medical conditions are limited or excluded under any policy you might take out.

It isn’t unusual for back problems and conditions such as stress to be excluded, and these are among the most common causes of absence from the workplace. Pre-existing medical conditions will also be excluded from your cover, and you’ll be required to declare these when taking out your Short Term Sickness policy.

Although short term cover, it still falls under the purview of the Financial Conduct Authority (FCA).

How can I cut the cost of the policy?

The best way to make sure you get good value for money when buying a Short Term Sickness & Unemployment policy is to compare a range of insurance policies from different providers. The experts at Mint FS will be happy to do this for you – saving you time, money and a lot of hassle.


Want to know more?

Speak to the experts at Mint FS today for an initial consultation on 0330 1355914 or complete our contact form and we will call you back.