ASU cover and "in receipt of JSA" requirement

LongTermLurker

I'm looking to change my mortgage ASU cover and have a question about a clause in a Key Facts document I've been given.

It says "Payment of benefits will only be made where an employee has become Involuntarily Unemployed, and is in continuous receipt of Jobseeker’s Allowance". Now I understand that Contribution based JSA only lasts 6 months and then you have to apply for Income based JSA - is that right?

If I was made redundant, I wouldn't get Income based JSA because of existing savings & investments. Is the above clause standard across policies as 12 months cover restricted to 6 because of savings isn't worth paying the premiums.

olly300

LongTermLurker wrote: »

I'm looking to change my mortgage ASU cover and have a question about a clause in a Key Facts document I've been given.

It says "Payment of benefits will only be made where an employee has become Involuntarily Unemployed, and is in continuous receipt of Jobseeker’s Allowance". Now I understand that Contribution based JSA only lasts 6 months and then you have to apply for Income based JSA - is that right?

Yep the savings and other income will have to be declared.

LongTermLurker wrote: »

If I was made redundant, I wouldn't get Income based JSA because of existing savings & investments.

You would get contribution based JSA for 6 months and depending on the amount of your redundancy pay you had left you would or wouldn't be eligible for income based JSA.

LongTermLurker wrote: »

Is the above clause standard across policies as 12 months cover restricted to 6 because of savings isn't worth paying the premiums.

Depends on your personal circumstances.

If you have enough money to cover your outgoings for 12 months or longer than the policy would be a waste of money. If you don't and you are permanently employed then it isn't.

LongTermLurker

Thanks Olly. The question wasn't so much about eligibility for JSA as much as whether the need to be on JSA was a common criteria for insurance policies paying out. I know for a fact I wouldn't get Income based JSA, with or without redundancy payments, so therefore the 12 month cover is effectively capped at 6. In reality, I'd expect to be out of work no longer than 3 months max and would have good chances of starting contracting work well before that, if I chose that route, but I still think it wise to have cover just in case.

I don't think the point is whether you have enough money to live off for a year, because building up that money is done for a reason (and not to save the government giving me some benefit out of the decades of NI stamps I've been paying... would be nice to think I could get some benefit in my hour of need rather than it all going to non-contributors, but that's another rant entirely ).

If you buy insurance, it's to protect you against the unknown, and it's none of the insurance company's business whether I have savings - if two people pay the same premium, they should expect the same length of cover, and that means not making the policy dependent on means-tested benefits.

olly300

LongTermLurker wrote: »

If you buy insurance, it's to protect you against the unknown, and it's none of the insurance company's business whether I have savings - if two people pay the same premium, they should expect the same length of cover, and that means not making the policy dependent on means-tested benefits.

Insurance companies like healthy profits and due to the number of things people try to claim on a policy they need clear, fair and strict criteria. In this case being in receipt of JSA is it. It's nice and easy to understand and there can be no challenges on the criteria with any of the regulators.

Also if you do go down the contracting or self-employed route you will probably find your ASU policy is a waste of money. While you can still claim JSA in some circumstances if you have problems getting work, an ASU will not pay out unless you completely stop working in that line of business for a limited number of reasons.

You are better of looking at PHI policies which you can only get through a broker. They will cover you for the rest of your working life if so needed.

LongTermLurker

Thanks again. Although it's clear and unambiguous, it dramatically changes the policy - it's no longer an insurance against being made redundant, it's an insurance against having no source of income, but that's not what I want to insure against.

I'm seriously considering just getting the accident & sickness elements, unless I can get one that covers me against being unemployed, rather than skint.

holderness

In answer to your original question, you will still get the insurance payment if you are still unemployed after the CB JSA runs out (6 months) if you don't qualify for IB JSA (spouse income/savings) you still have to sign on every 2 weeks for 'NI contributions only' and be seen to be actively looking for work (keep job apps, 1 per week minimum) to comply with the terms of your insurance.