ASU insurance - opinions?

lowis

I think I need to take out an ASU policy as I am finally about to become a home owner (lodger of the bank).

My employer provides me with Long Term PHI insurance (via UNUM) which kicks in after 90 working days (about 5 months then) and will pay me 60% of my gross taxable income. So basically I only need a 12-month term policy to cover me for short-term problems during the 5 months my employers cover would not cover me for.

I have searched via moneysupermarket.com and two insurers seem to priovde the best quotes - Pay protect and Security First. They both quote about £35 for £1100 a month benefit.

Does anyone have any opinion on these two providers?

Thanks,

dunstonh

If you go with an ASU you are throwing money away. You are already at 60% protection and even if you insure yourself for more, you wont get it.

Copy and pasted from the FSA site:
Insurance aims to put you back to the position you were in before you suffered a loss. But it does not allow you to make a profit out of your misfortune. So the maximum amount of income you can replace through insurance is broadly the after-tax earnings you have lost less an adjustment for State benefits you can claim. This usually translates into a maximum of, say 50% to 65% of your before-tax earnings.

General insurance policies like ASU are not underwriten to your personal circumstances. They look at whether they will pay out if you claim. You would almost certainly find yourself with too much income protection and your claim would be reduced.

So, you would be paying £35pm for a policy that only covers you for unemployment. (90 days is 3 months not five and most ASUs have a 30 day qualifying period).

lowis

thanks Dunston - i just checked the policy and it is in fact 13weeks (3 months thereabouts) - i got it totally wrong.

I am not looking to profit - just cover myself for the deferrment period. i guess from your post that if i took out another 12month term policy then I jeopardie my existing one with my employer?

Perhaps I should just look into unemployment then?

EDIT: umemployment only is almost the same premium as full ASU. Security First seem cheapest but are the decent?