When we think about insurance, the first thing that comes to mind will likely be medical insurance. After all, private healthcare can be prohibitively expensive.
However, medical coverage doesn’t keep you protected from all situations; which is why it is commonly paired with personal accident insurance.
What is a personal accident plan exactly?
Personal accident insurance plans are annual policies that typically provide compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. Though the definition for these conditions may sometimes vary from insurer to insurer.
More often than not, personal accident insurance often gets mistaken for life insurance, as both may seem to cover similar issues at a glance. However, while they may have some overlap, they are in fact different.
Life insurance provides a death benefit. The insurance company provides a lump-sum payment to the beneficiaries upon the insured’s demise. Life insurance covers claims to death in general. In a sense, it can be described as having a wider scope overall.
On the other hand, the thing that separates personal accident insurance from health and life insurance is the cause of injury or death. Generally speaking, personal accident policies are designed to guard individuals in the event of an accident only. Whether it be death, injury, or long-term impairment, personal accident plan policyholders receive a tax-free lump sum, as long as said accident falls under the terms of the insurance plan.
What to look out for in a personal accident plan
Personal accident plans are an investment. This is why you should make a smart decision while being well-informed about the policy you will be buying.
Always take the time to do your research and carefully read and understand the caveats of your chosen personal accident policy. You wouldn’t want to find out that your particular profession disqualifies you from receiving benefits once you actually do get injured, right?
Here are a few key things to consider when choosing a personal accident policy:
Type of plan
Typically, you can buy either an individual or a family personal accident cover, whichever suits your needs the most. If you are considering a family plan, then make sure the policy covers your family against accidents that may take place in day-to-day life activities. This is especially important if your family members are working in potentially hazardous jobs.
Premiums
Insurance premiums are basically subscription costs that you pay at regular intervals to continue benefiting from insurance coverage. When looking into any insurance plan, not just for personal accidents, you should always consider whether the premium is within your budget while reflecting the coverage of the policy. There should be a balance between coverage extended and premium charged. For example, low-cost with minimum cover may not be an adequate way of getting insured as it may fail to benefit you when you need it most.
There is a trick to get the most out of your insurance. You will basically have to go out of your way to look for the company that is most interested in insuring you. Always ask agents if there is anything you can do to reduce premiums. Better yet, do this for multiple companies so that you can get an idea of what the average cost is like for your particular risks. By asking for an explanation as to why your premium will cost as much, you will be able to better understand if you are in a position to get better pricings.
Policy Coverage
You should look for policies that include almost all of the daily activities which may lead to accidents at home, at the workplace, or anywhere else. The wider the net of the policy, the better. With a more extensive policy, you can have a better peace of mind.
Reputation
Even if you do spot a personal accident plan that seems worth it on paper, you should always take the time to do a background check on the insurer. Look into their track record of claim settlements and their history of coverage. This will help to ensure that you will be receiving quality and reliable service.
Benefits
Many personal accident plans will have similar and in-built benefits and features. These generally include things such as permanent total disablement, permanent partial disablement, and accidental death benefit. The key is to look at what extraordinary benefits that the plan offers to get the most value out of it. Some of these extra benefits can include things such as covering for ambulance costs and hospital expenses. For the avid travelers out there, getting a plan with coverage abroad is a must.
Exclusions
One of the most important aspects to pay attention to. Keep tabs on events and situations that are excluded from the policy coverage. If the excluded event is likely to occur due to occupation and other reasons, then you should consider passing on said policy.
Keeping these things in mind, you should be able to determine which personal accident plans are best suited to your needs. If you are still a little lost on where to begin, here are a few options to consider for your personal accident policy:
| Provider | Death & Permanent Disablement (RM) | Medical Expenses (RM) | Funeral / Repatriation Expenses (RM) | Other Benefits |
|---|---|---|---|---|
| AXA | Up to 100,000 | Up to 4000 | Up to 10,000 | Hospital allowance, kidnap benefit, ambulance, etc. |
| Tokio Marine | Up to 1,000,000 | Up to 20,000 | Up to 15,000 | Dismemberment, Miscarriage due to motor accident, ambulance, etc. |
| MSIG | Up to 750,000 | Up to 20,000 | Up to 15,000 | Ambulance, repatriation, etc. |
| Allianz | Up to 50,000 | Up to 10,000 | Up to 5000 | Hospital allowance, bereavement, dental, etc. |
| Etiqa | Up to 200,000 | Up to 5000 | Up to 3500 | Bereavement, ambulance, prostheses, etc. |
| AIA | Up to 200,000 | Up to 12,000 | - | Double living benefit, alternative treatment benefit, ICU allowance, etc. |
| Kurnia | Up to 1,000,000 | Up to 10,000 | Up to 5000 | Bereavement, hospital allowance, |
| Berjaya Sompo | Up to 1,000,000 | Up to 10,000 | Up to 5000 | Dental, coma, kidnap benefit, prosthesis, etc. |
This is of course, not an exhaustive list of personal accident policies. If you are curious to find out about more plans, iMoney has a comprehensive list where you can compare and consider takaful and conventional personal accident plans with ease. You can find this list here.
Remember to always double check with an insurer if you are unclear about the terms of their policies, especially if you work in a job that could be potentially hazardous.
Keep in mind that personal accident plans are not a substitute for life insurance. It serves as an additional financial safety net for you and your loved ones in case you are met with an unfortunate accident that could cause severe or disabling harm. In order to be absolutely secure, personal accident plans should be utilised in conjunction with life insurance.
