Accident, sickness and unemployment insurance

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A financial cushion if illness, injury or redundancy strikes

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What is accident, sickness and unemployment insurance?

Accident, sickness and unemployment (ASU) insurance is designed to cover a portion of your income if you can’t work because of illness, injury or compulsory redundancy.

ASU is a type of short-term income protection, typically offering payouts for up to 12 months if you make a claim. It means you can still cover your mortgage and other bills if you’re ill or injured and can’t work.

Accident and sickness insurance, and unemployment insurance, are available as standalone products, so it’s worth considering whether you need all these in one bundle.

Quick tip

You should also check what your employer offers in terms of sick pay and redundancy packages, so you’re not buying insurance you don’t need.

Women with a leg bandage

What does accident, sickness and unemployment insurance cover?

ASU can cover you if you:

  • Fall ill and are too sick to work for an extended period

  • Get injured and need to take time off work

  • Are made redundant

  • Lose your job through no fault of your own.

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ASU won't generally pay out if you:

  • Get sacked from your job, quit voluntarily or deliberately take out an ASU policy knowing you’re about to be made redundant

  • Try to claim for a pre-existing medical condition

  • Take time off work because of self-inflicted injury or reckless behaviour

  • Make a claim during the policy’s deferred or waiting period (the period after the policy starts before you can make a claim, typically 30 days).

Bear in mind...

Certain occupations might not be covered, and some policies won’t cover common work-related conditions like back pain and stress. Check your policy for the full list of exclusions.

For extra coverage, you could consider personal accident cover, which could pay out a lump sum if you suffer a serious injury that prevents you from working.

Tim Knighton

What our expert says...

"With around £5,000 in the average emergency fund, most UK households would soon run out of money if they had to survive solely on their savings. Accident, sickness and unemployment insurance could cover essential outgoings, such as your mortgage, food and other bills, if you temporarily lost your regular income.

"When choosing an ASU policy, bear in mind that you may not need the maximum amount of cover available to you. This can help reduce the cost of your premiums."

Tim Knighton, Life, health and income protection insurance expert

How does accident, sickness and unemployment cover work?

Pay your monthly premium

In return for paying a monthly premium, you could receive a payout if you're unable to work for a reason covered by your policy

Make a successful claim

If your accident, sickness and unemployment (ASU) insurance claim is successful, your insurance provider will pay you a tax-free percentage of your income.

This is known as your monthly benefit amount

Get financial support while you're off work

Your monthly benefit amount is typically paid for up to 12 months and can help cover your outgoings. Some ASU policies are directly linked to mortgage or loan repayments.

Mortgage payment protection insurance and payment protection insurance are designed to cover repayments on a specific debt, such as a mortgage, loan or credit card

Do I need ASU insurance?

While you may be fit and healthy at the moment, and in a secure job, it’s impossible to predict what the future will hold. According to figures released in July 2026 by the Office for National Statistics, there were 3.6 redundancies for every 1,000 employees in a three-month period in the UK.

If you unexpectedly found yourself out of work, would you be able to rely on your savings to cover your bills? And for how long?

ASU insurance is designed to offer reassurance that you’ll be able to keep up with your financial commitments if you’re unable to work. It could pay out until you recover, retrain or find a new job.

If you’re employed

If you have a job and are considering an ASU policy, first check what your employer offers in terms of sick pay and redundancy packages, so you’re not buying something you don’t need.

If you’re self-employed

If you work for yourself, you won’t have an employer to provide sick pay. This means that several elements of ASU insurance, particularly sick pay insurance, could be useful.

Monthly payouts for self-employed income protection can be determined by your gross annual earnings.

If you’re entitled to sick pay and redundancy pay

You’re unlikely to need accident, sickness and unemployment insurance if you work for a company that offers generous sick pay and redundancy packages.

But if your employer pays only the statutory sick pay minimum – £123.25 for up to 28 weeks – and their redundancy packages are less than generous, you may want to consider accident and sickness insurance.

Am I eligible for ASU cover?

To be eligible for accident, sickness and unemployment cover, you’ll typically need to be:

  • Aged between 16 and 65

  • In full-time or part-time employment

  • A UK resident and taxpayer with legal right to work in the UK

  • Be employed in the same job for at least the last 12 months

  • Meet the minimum hours of employment as stated in your policy, typically 15 hours a week

  • Be registered with a UK doctor.

When you apply, you may also have to answer some questions about your job, lifestyle and medical history.

How much ASU cover do I need?

An ASU policy usually pays out a pre-tax portion of your salary. You can choose a percentage amount that represents your mortgage payment or your total bills.

For example:

  • If you had a pre-tax income of £2,500 a month

  • Agreed a 50% ASU policy

  • You’d receive a monthly insurance payout of £1,250.

Think carefully about how much cover you need. Choosing a lower percentage will usually decrease your premium, but you need to make sure you have enough cover in place to afford your monthly outgoings.

Our online comparison service allows you to cover up to 60% of your gross monthly income.

Man on sofa examining finances

When can I claim on ASU insurance?

To make an accident or sickness claim, you’ll usually need to have been signed off work by a GP or other medical consultant. There’ll typically be a deferred period – a fixed number of days or weeks – before you can make a claim. You should check your policy wording for full details.

To claim unemployment cover, you may also have to be out of work for the duration of a deferred period. You may also need to have signed up for Jobseeker’s Allowance (JSA).

What other types of income protection are available?

There are other types of insurance designed to help cover your outgoings. These include:

Income protection insurance

Critical illness cover

  • Critical illness cover is a type of life insurance that pays out if you have a serious injury or illness covered by the policy. It provides a one-off, tax-free payment, rather than an ongoing replacement income.

Mortgage protection insurance

What do I need to get an ASU policy quote?

Once you’ve chosen the type of income protection to suit you best, we need some details, including:

  • Your name, age and address

  • Whether you’re employed or self-employed

  • The type of job you do

  • Your income

  • How much cover you want, based on your monthly income

  • Whether you own or rent your home

  • Your deferred period (the maximum number of days you want to wait before the policy pays out)

  • If you smoke or use nicotine-based products.

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More on income protection insurance

See our guides on how you could protect your income if you're unable to work

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Mortgage protection insurance
Cover your mortgage if illness, injury or job loss stops you working
Compare unemployment cover

FAQs

How long will ASU pay out for?

ASU cover is designed to cover periods of temporary unemployment, sickness and injury. A typical policy will pay out for 12 months.

Long-term income protection can last up to retirement age, but premiums will be more expensive.

Your ASU policy is unlikely to pay out right away. There’s a waiting period at the start of the policy before you can claim – typically 30 days. On top of this, there’s also a deferred period, which you decide on.

That means, for example, if you buy a policy with a waiting period of 30 days, choose a deferred period of 60 days and make a successful claim, you’ll receive your first payout on day 91.

If your policy offers ‘back-to-day-one cover’ there’ll be no voluntary deferred period.

Is ASU the same as PPI?

No. ASU is not the same as PPI, although they are similar.

ASU offers a replacement for a percentage of your wages, to allow you to maintain your regular outgoings.

PPI (payment protection insurance) is designed to cover payments for specific debts, such as a loan or credit card.

Does ASU cover illness?

Yes, ASU can cover loss of earnings through illness or injury. But it usually only covers periods of up to 12 months, even if you’re unable to work after this time.

Income protection insurance is more expensive, but it’s designed to pay out until you can go back to work or you retire.

Depending on your health, it’s important to consider which cover is right for you.

How does ASU insurance affect my sick pay?

Accident, sickness and unemployment insurance doesn’t affect your sick pay. But your sick pay can affect the length of time you choose to wait before your ASU payouts kick in.

Sick pay varies, depending on where you work. Some employers will give you your full salary for a certain time period while you’re ill. Others may only pay statutory sick pay for up to 28 weeks.

Is income protection the same as ASU insurance?

ASU is a type of income protection. It’s sometimes known as short-term income protection and is designed to cover temporary periods of unemployment, illness or injury.

Traditional income protection policies typically pay out over the long term or until you retire. However, they typically have longer deferred periods, premiums are more expensive, and they won’t cover redundancy.

Can I get insurance for redundancy?

If you lose your job, redundancy insurance is one way to secure a regular income to replace your lost wages.

After a deferred period, you’ll receive a tax-free income to cover your monthly outgoings. Payments typically last for up to a year.

It’s worth remembering that ASU won’t cover you if you take voluntary redundancy and it won’t pay out if you’re fired for misconduct.

You can’t compare standalone polices for redundancy insurance at Compare the Market. But you can compare quotes for different types of income protection insurance, which include unemployment cover.

Does ASU cover mortgage payments?

You can use ASU payouts however you like so, yes, you could use the money to cover your mortgage payments.

Alternatively, you could take out mortgage payment protection insurance (MPPI). It could cover your mortgage repayments if you become ill or lose your job through no fault of your own.

What is a deferred period?

A deferred period is a fixed period of time that has to pass before your monthly pay-outs begin. During this time, you might use your savings or company sick pay to cover your expenses.

You can choose the deferred period yourself, depending on your needs. The longer the deferred period, the cheaper your premiums are likely to be.

Note that the deferred period comes on top of the policy’s ‘waiting period’, which is the period after the start of the policy before you can claim – typically 30 days.

Will I be accepted for sickness insurance?

Whether you’ll be accepted for ASU or other types of sick pay insurance depends on your personal circumstances and the insurance provider. If you’re over 65 or have been in your current job for less than six months, you might find it difficult to get ASU cover.

Each insurance provider will judge risk in their own way, meaning you’ll get different quotes from different providers. Always read your policy carefully to make sure you have cover that best suits your needs.

How can I compare accident, sickness and unemployment protection polices?

Our comparison service, provided by our trusted partners Howden Life & Health, makes it easy to compare ASU insurance.

Just give us a few details, then choose the kind of cover you want: accident and sickness insurance, or accident, sickness and unemployment insurance.

We’ll list your quotes in price order, starting with the cheapest at the top. But don’t make your decision based on price alone. Look for a policy that’s right for you.

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Tim Knighton
Reviewed 30 Jul 2026 by Tim Knighton Life, health and income protection insurance expert

Tim Knighton is an expert in building and managing relationships with big brands for the benefit of customers, with more than 20 years of experience. He seeks out the right products that look after you and those you love most during the toughest times.