Accident, Sickness & Unemployment Policies
Features
These are general insurance policies which are usually
renewed annually. As such, the insurer may increase the premiums, or
refuse to renew in the event of a change in your circumstances, or bad
claims history.
They offer lump sum benefits in the event of:
-
Death by accident
-
Loss of limbs by accident
-
Loss of sight in either / both eyes by accident
-
Permanent total disability as a result of an accident
They offer weekly/monthly benefits for
-
Temporary disablement as a result of an accident
-
Temporary total disablement caused by illness of any
kind. Benefits are usually limited to a percentage of earnings such as
60%.
-
They can also offer cover against redundancy. The
premium cost for this option is relatively high.
This sickness benefit is usually payable after a short
deferred period, and is for a maximum period of 52 weeks.
Taxation of Benefits:
As a general rule, benefits paid on
privately-funded ASU policies are paid free of income and other taxes. This
is important when estimating the extent of cover required.
For group schemes funded by the
employer, the benefits will ultimately be taxable in the hands of the
employee.
Their Use
They are particularly useful for the self-employed, who
need immediate income if unable to work.
They are also useful for those who find the premiums for
permanent health cover outside their budget. However, the benefits paid
are for a maximum time period, and then they stop regardless of any
recovery by the insured.
|
