Accident Sickness & Unemployment
Under Department of Social Security rules, homeowners who bought their property after 1st October 1995 have to wait nine months before they receive help with their mortgage interest payments from the State.
And, even then, they must be in receipt of Income Support or the JobSeeker's Allowance, so their savings must not exceed £8,000. And benefits only cover interest on the first £100,000 of the loan.
By taking out ASU insurance alongside your mortgage, you can set the deferral period yourself, knowing that a proportion or all of your mortgage payments will be covered after a certain number of weeks or months (usually 30, 60 or 90 days) for a given period.
Critical Illness
This insurance pays out on the diagnosis of certain specified critical illnesses. Most policies will pay out following heart disease, a stroke, renal failure, cancer, paralysis, or a major organ transplant and coronary artery bypass surgery.
The money is usually paid out in a lump sum and is tax-free, and maximum benefit varies from about £100,000 to £250,000. It is usually paid out within 28 days of diagnosis.
Single people need critical illness insurance to prevent them becoming dependent on friends and family. Dual-income couples need it to prevent them suffering a financial blow should one partner have to stop work. But cover is not cheap, so it pays to shop around.
You can only claim once on a critical illness policy.
-Remember Do not buy a policy purely on the basis of cost
-Ensure that the insurance company supplying your policy is financially
secure
-Check that permanent disability cover is covered by your policy
-Check that the insurance company is a number of an ombudsman scheme
10 things to consider before buying Critical Illness cover
1. PREMIUM
How competitive is the price you are paying?
2. TYPE OF POLICY
>From income and lump sum to level, level and decreasing there are dozens of options. Is yours right for you?
3. GUARANTEED RATES
Your premiums might seem cheap today but will they stay that way?
4. LIFE COVER
Most critical illness policies include life cover free of charge. Does yours?
5. NUMBER OF CONDITIONS
Make sure to read exactly what you are covered for. Some policies cover just a few conditions, some cover nearly 40. But how many are you covered for? And does your insurer hold the right to change them or are they fixed?
6. CHILDREN'S COVER
Now one of the highest areas of claims but not all policies automatically cover your children. Does yours?
7. OCCUPATION CLASS
Are you insured if you cannot do you own job or if you cannot do somebody else's?
8. AMOUNT OF COVER
Do you have enough cover? Do you have too much?
9. LENGTH OF TERM
Are you covered for long enough? What will you do when your cover runs out?
10. TRUSTS
Critical Illness Cover often comes with life cover included. If the policy is not written with a trust 40% of the pay out could go to the tax man. Is your policy in trust?
* Always consider alternatives as Income Protection could be more suitable for you.
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