Could You Cope Financially if You Couldn’t Work Due to Accident or Sickness?

This post has been kindly funded by Freedom to Insure, who have asked me to share my thoughts on Accident, Sickness and Unemployment Policies.

They are an independent insurance comparison company that compares the entire UK market to find the best insurance products for their customers. All opinions are my own!

When the hubby and I were heavily in debt, aside from the constant feeling of having our finances squeezed into oblivion each month, we often suffered pangs of panic at the thought of one of us not being able to work. That would have been pretty catastrophic for us with the amount of debt that we had to pay back, not to mention our regular household bills.

Even though we had life insurance, we didn’t actually have an Accident, Sickness and Unemployment (ASU) policy in place. We had thought about it over the years but from what we’d heard from our friends, we assumed that there was always an excuse for an insurance company not to pay out. We just thought we’d be paying our premiums for the sake of it if it ever came to the crunch.

So we went about our debt repayment journey without an ASU policy. It’s only now that I’ve taken some time to research ASU policies and what they cover that I know that they actually do pay out should the worst happen. Yes, there are clauses – as with any policy, I guess. But they seem pretty standard and sensible to be honest.

ASU policy clauses

I found out more information about ASU policy clauses from the Freedom to Insure website. Basically, these policies don’t cover against pre-existing medical conditions – fair enough. They also don’t cover for pregnancy problems, stress or AIDs related illnesses or if you can’t work due to self-harm incidents. They don’t cover for if you have an accident whilst knowingly doing something dangerous, like riding a motorcycle or if you try to claim for unemployment where you already knew you would be out of work, such as your planned seasonal work coming to an end.

I was surprised to learn that you can get cover if you’re self-employed – I thought the opposite beforehand, which is one of the reasons I didn’t look any further into getting an ASU policy. It’s a sobering prospect to think about the impact of what would happen financially if you were to get sick or get the sack at work. Could you pay your bills or would a situation like this send you spiralling into debt?

It’s worth thinking about the worst case scenario

In our own situation, if I couldn’t work for any reason, we could afford to live on the hubby’s wages thankfully now that our debts have finally been paid off. But if the hubby lost his job or got some kind of hideous illness, then things would be quite different. I’d be mostly worried about paying our rent, household bills and being able to buy enough food to feed us.

We have an emergency fund thankfully which would keep us going for a couple of months, but after that we’d probably be experiencing some financial difficulty. An ASU policy can pay out for up to 12 months. We’re definitely considering whether to get a policy now and thinking about this has made us want to top up our emergency fund a bit more too!

I’d like to know what you think about policies like this. Do you have one in place already? Please share your thoughts below!

*Photo courtesy of Flickr and modified by Disease Called Debt.