ASU, when associated with a mortgage is often called MPPI cover. It covers your mortgage payments if you're unable to work due to accident, sickness or unemployment
MPPI is designed to cover your mortgage payments if you're unable to work due to accident, sickness or unemployment. In exchange for a monthly premium, MPPI pays you a set amount each month, usually for a period of 12 to 24 months.
When you take out an MPPI policy, you choose how much cover would be required to protect you mortgage each month. Some policies let you also cover other monthly bills.
Most MPPI providers let you have a maximum benefit of between £1,500 and £3,000.You may only be able to get up to, say, 75% of your gross monthly salary though, or up to 150% of your monthly mortgage payment.
The biggest problem with MPPI is the way it is underwritten. MPPI usually does the full medical checks at the point you put in a claim - this means, for example, that you can't be certain any pre-existing illness will be covered until the moment you put in a claim.
The waiting period is how long you have to wait once you've put in a claim before the policy benefit starts to be paid out. It can range from day 1 cover to 6 months.
In general, the longer the waiting period you choose, the cheaper the policy. If your employer pays you sick pay, you may want to take out a policy with a waiting period that ends when these benefits end.