Accident and Sickness Insurance

It is possible to take out a policy that includes accident and sickness insurance only. If you feel secure in your job and therefore do not feel the need for the unemployment insurance section of the policy then it is perfectly acceptable to exclude this cover.

The policy would now only payout if you were to suffer an accident (such as a nasty fall) or sickness which left you unable to work.

Naturally, excluding unemployment insurance from your policy will make the monthly premiums cheaper. If you decide to opt for this option it is definitely worth considering a full income protection insurance plan instead.

Should you suffer an illness or injury which left you unable to work how long could you survive on your savings? A recent research study conducted by Aviva showed without further borrowing the average British household would only be able to access £914 of disposable income.

Sickness protection can provide you with the peace of mind knowing should you be unable to work your monthly financial obligations will be covered. If you do have concerns over your financial situation should you be made unemployed then you do have the option to protect yourself against forced unemployment/redundancy.

When considering sickness and accident insurance it is important to understand the level of employer sick pay you are likely to receive. Your employer is required by law to pay a Statutory Sick Pay for 26 weeks, this currently stands at £79.15 per week.

If you are still unable to work after the initial 26 weeks of Statutory Sick Pay you may be entitled to apply for government support in the form of Employment and Support Allowance, which currently stands at £95.15 per week.

Given the level of support you can expect from the government the vast majority of us would struggle if we were required to support ourselves solely on sick pay and state benefits. In this case, we would have to make a significant reduction in our standard of living.

Sickness insurance does exactly what it says, it insures your income against sickness. Please be aware that any condition you may have suffered prior to being covered could well be excluded as a pre-existing condition should you be unable to work due to that specific illness.

It is important when buying a sickness insurance policy to understand fully the restrictions that could be imposed on you so there are no surprises when you come to claim.

We have covered sickness insurance but what if you suffer an accident and are unable to work. We all expose ourselves to risks everyday without thinking, if you were to suffer a nasty fall which left you unable to work how long could you survive on your savings.

Accident and sickness insurance can provide the peace of mind knowing should something happen your monthly financial obligations would be covered so you can concentrate on recovery. There are a range of accident insurance products on the market with prices varying considerably so it is important to understand the differences in cover to truly make an informed decision.

Long-term income protection can provide security from the risk of accident or sickness all the way up until planned retirement. There are fewer restrictions with 'full fat' income protection over accident and sickness cover so it is well worth comparing the premiums of the two policies to see if there is greater value in this more comprehensive plan.

Unlike long term income protection insurance there is limited underwriting when taking out an accident and sickness policy, no medicals are required and your lifetyle does not affect the premiums, smokers do not receive inflated risks due to the health risks and with some policies even those in riskier occupations do not suffer increased premiums.

However please be aware that pre-existing medical conditions will be excluded. If you suffer time off work due to an illness or injury you have suffered prior to the commencement of the policy it is likely it will not be covered.

A illness insurance policy provides short term income protection. You can choose a length of cover of either 12 or 24 months.

A 12 month benefit period will provide a monthly benefit should you be unable to work due to accident or sickness for the lesser of 12 months or until you return to work. The longer the period of cover you select the greater the risk to the insurer and thus the higher your premiums.

Most sickness and accident cover will allow you to insure up to the lesser of 65% of your income or £2,500, this can also be linked to any mortgage payments you need to meet.

The larger the sum you want to cover the greater the payment that will have to be made by the insurer and thus the higher the risk, thus greater cover means higher premiums.

The deferred period on an accident and sickness insurance plan is generally shorter than that of a long term income protection policy as the term of payment is shorter.

A deferred period is the length of time you must wait from the day you are unable to work to the time when a payment is eligible. The shortest deferred period tends to be 30 days whilst many plans offer periods up to 26 weeks.

There is also the option for the cover to back date your claim to the first day of either illness or injury. These policies are called 'back to day one' and your benefit begins to accumulate from the day you are unable to work rather than the end of your deferred period. Regardless of this all policies require a minimum of 30 consecutive days off work before you are entitled to payment.

The longer the deferred period the lower the risk to the insurer and thus the cheaper your premiums.

If you are self-employed you are still entitled to take out a sickness and accident insurance for self employed. This includes sole traders and directors of limited companies, although you are still limited by the set cover limits and terms and conditions of a standard policy.

If you would like some competing quotes please complete your details in the quote box provided above. On the other hand, if you would like to speak to someone to run through your requirements and policy options then one of our expert advisers would be more than happy to help.

As Drewberry is independent of any insurer we can arrange a suitable accident and sickness protection plan from any one of our large panel of insurers and can therefore provide truly impartial advice. We want to provide you with all the information you require in order to make the best decision on your protection needs.