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Sickness Can Get You Into Debt, Warns British Insurance
The risk of losing an income due to illness or an accident is as high as redundancy so workers must check whether their sick pay is enough to cover bills says Nel Mooy from independent Payment Protection Insurance provider, British Insurance.
With 7.7% of working-age Britons out of work*, Nel believes the overall number of people relying on State handouts due to disability and illness may be higher than those claiming unemployment benefits.
A view supported by the OECD. In its ‘Sickness, Disability and Work; Breaking the Barriers’ report it says ‘In the mid-eighties, the number of people receiving unemployment benefits was three or four times higher than those claiming disability benefit. Ten years later, in 1997, the figures equalled out and since then the number of people on disability benefits has always exceeded the number of unemployed’.
The OECD confirms mental health problems appear the fastest growing – an opinion the mental health charity MIND agrees with. It predicts one in five workers suffer from work-related stress - a figure the University of Warwick’s Institute for Employment Research reports will rise as the recession continues to cause greater organisational change, increased job uncertainty and extra workloads – key contributors to the condition.
British Insurance says these findings, coupled with statistics from the Royal Society for the Prevention of Accidents which reveal 2.7million people each year are treated in Accident & Emergency departments following home accidents, illustrate to workers the importance of knowing what income they can draw if they’re off for a period of time, as sick pay allowances vary amongst employers.
“Workers should not take it for granted they’ll be able to receive a full salary whilst off sick or recovering from an accident,” says Nel. “Although the public sector allows employees to draw up to six months full pay before dropping down to half, this is under review as a result of the spending cuts. And private employers may not be so generous – many put staff onto lower Statutory Sick Pay (SSP) as a way of saving costs and reducing absenteeism.”
SSP – at £79.15 per week - is payable for up to 28 weeks, After this, employees may be asked to apply for Employment & Support Allowance (replaces incapacity benefit) via a Jobcentre Plus office. Applicants are then assessed on their capability to work before a weekly ESA payment of up to £65.54 is made. Workers with savings or households with other forms of income may not be eligible
Nel continues: “Employees without the benefit of Contractual Sick Pay have to rely on Government support to meet their financial commitments in the event of their income being interrupted. However, there are alternatives for Payment Protection Insurance which replaces that lost income for up to a year should sickness or an accident occurs since.”
She concludes: “Those who are aware they will only be able to draw their salary for a limited period of time or whose employers offer minimal sick pay should consider PPI cover, especially as the premiums for accident, sickness and unemployment cover are similar to unemployment-
“It’s also worth ensuring the policy excess reflects the employers’ sick pay arrangement, for example there’s no point opting for back-to day-one cover and paying a higher premium if you’re likely to receive a full salary for three months.”
Note to Editors
* Office for National Statistics unemployment figures for three months to September 10.
British Insurance compared the premiums and cover options of five online PPI providers on 3 November, obtaining quotes for a 30 year-old requiring £1000 of income and mortgage payment protection insurance. Cover is usually sold per £100 of benefit, so where a premium of £31.10 is quoted, it would be £3.11 per £100 of benefit.
Payment Protection Insurance Claim pays out if the claimant loses an income due to unemployment, accident or sickness, British Insurance offers cover specifically to meet monthly mortgage repayment costs (mortgage payment protection insurance) or to pay a broader range of bills (income payment protection).
Check the PDF File attached for more details.
British Insurance is a widely-recognised consumer champion and one of the UK’s leading independent providers of Payment Protection Insurance. It is a trading name of Towergate Underwriting Group Limited who are authorised and regulated by the Financial Services Authority.
Having provided endorsements from insurance industry and media commentators we were delighted our high ethical standards and market-leading portfolio were recognised. For us, the agreement to use British in our name is the ultimate accolade and over the years we’ve built upon our solid foundations and trusted reputation to develop flexible policies with insurers.
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British Insurance is one of the UK’s leading independent Unemployment, Accident and Sickness insurance providers.