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ASU Case Studies

Case Study 1

Unemployment cover or not?

John was 25. He had a good income working in Construction his net income was approximately £2,500 per month. His wife Kate was 28 and they were expecting their second child.

Kate had decided not to return to work after the birth. If, because of an accident or sickness, John was unable to work, his employer’s scheme would pay salary for a small period. However, if he was made redundant, John would receive only a single month of salary in lieu. In these circumstances, John had a need for unemployment cover.

John and Kate had a mortgage of £190,000 costing £1,000 a month. Utility bills and other expenses brought their total outlay to about £1,500 per month.

Their lives were about to change and John was feeling the pressure to keep salary coming in to care for the family. They therefore decided that John should obtain Income Protection cover.

John was a skilled employee and was confident of a rapid return to work. With this in mind, he didn’t want to pay for unemployment cover he would never use. He contacted 1 Stop Insurance and we researched his requirements and wishes in detail. We offered cover of £1,500 per month – taking advantage of the maximum allowable cover. The cost to John for the cover was only £30.00 per month and the rate would not increase according to age.

Case Study 2

A gradual return to work.

Tim is 33. His net income* was £1,360 a month as an employee in electrical manufacturing. His job could be physically demanding. Having researched the market, Tim took out Income Protection with 1 Stop Insurance to protect his monthly income against accident, sickness and unemployment (ASU). Tim took the option of a maximum benefit period of 12 months per claim. He insured himself for £1,020 a month – taking advantage of the maximum allowable of 75% of her net income*.

Tim was cleaning windows at home one day when he fell off the ladder, injuring his neck. For the first four weeks Tim’s employer paid him his usual salary. However, after that he was placed on statutory sick pay of £70.05 a week – the standard rate since April 2006. Tim’s claim payments from the 1 Stop Insurance policy protected his income.

After six months, Tim had recovered sufficiently for his doctor to certify him fit for work but he was not yet physically capable of doing his previous usual job. To help ease him back in to work, Tim’s employer offered him a part-time office job. He was delighted to accept the offer. However, the part-time net monthly income was just £540 per month. Tim therefore contacted 1 Stop Insurance and the insurers agreed to place him on their special ‘Return to Work Benefits’ scheme.

Rather than stop all benefits once a customer returns to work (as is common elsewhere), the policy paid Tim the difference between the maximum allowable monthly benefit of £1,020 per month and the part-time net monthly income of £540. Tim continued to improve and after a further three months he had fully recovered and was able to return to the previous job on full pay.

Case Study 3

Review and save!

Judy was responsible for a mortgage taken out through her bank several months ago. The loan had payment protection insurance incorporated in order to protect the payments if she became unable to work. As part of a more general financial review, Judy decided to re-assess her current arrangements and calculate just how much protection she actually required. We found that her outgoings – utility bills, community charge, credit card payments and general living costs – significantly exceeded her current level of cover. The stark conclusion prompted Judy to worry about how her family would survive if she couldn’t work.

Judy contacted her bank to alter her existing arrangements. However, because the policy was capped at the level of the repayments she could not arrange an increase.  Judy researched the internet for help and found 1 Stop Insurance.  We offered her an alternative type of cover. With the new cover, Judy was able to protect not just her monthly mortgage but some of her other outgoings as well.

The rates were so competitive that Judy arranged more than double her current monthly cover and still paid less in premiums than she paid to her bank. Judy then cancelled all her prior protection products. In addition, subject to eligibility, Judy  received a waiver of the initial exclusion period.