accident & illness insurance

homersimpson_3

this apparently pays out if you are unable to return to work following accident or illness. what are the pitfalls to avoid? - is it worth it or a waste of time? what is average cost? will any payments you receive affect your benefit? what is average length of time insurers firms will pay out? who are leading companies etc?

MortgageMamma

Hi There

Have a read through this article and the following thread and you should be able to make your own mind up if its worthwhile!

http://forums.moneysavingexpert.com/showthread.html?t=219256&highlight=mortgage+payment+protection+cost

dunstonh

When you say accident or illness are you refering to Accident, sickness and unemployment plans (ASU or MPPI) or permanent health insurance (PHI)?

homersimpson_3

When you say accident or illness are you refering to Accident, sickness and unemployment plans (ASU or MPPI) or permanent health insurance (PHI)?

sorry for delay in replying. i don't think i'm referring to ASU, MPPI or PHI.
My friend got leaflet from union which gives her option to purchase a "reduced pay insurance policy" which provides £500 per month if "pay is reduced following absence from work due to accident or illness". Cover payable for maximum of 26 weeks & they pay out 3 months after first payment made. Martin's article suggests unecessary-

Do you get decent sickpay? If an accident or sickness stopped you working, what would your firm do? Many pubic sector workers get a substantial proportion of their salary. If you’ve got good sick pay terms, the accident and sickness element is probably unnecessary.

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MortgageMamma

Unecessary? I don't think - depends how long you are off sick for and what employment benefits you would get, even 26 weeks on full pay would not help if you were diagnosed with cancer

I much prefer my clients to have a 12 month ASU policy, and a PHI policy with a 12 month deferred term to cover all eventualities (this keeps the PHI cost down), but unfortunately the "it will never happen to me" mentality and the "I can't afford the extra £20 a month I'd rather spend it socialising" attitude means that most people have none or little protection in this eventuality, then they complain when the mortgage companies want to reposess. I only wish MPPI was made compulsory at the very least. The yanks have got it right, they insure for everything.