Personal Accident Insurance Explained

A nutshell guide to Personal Accident Insurance, if you've always wondered what the policy is all about!

True enough, there are all kinds of insurance in existence. Though many people have heard of personal accident insurance; few know what exactly it does for you.

After all, if you have a car accident, shouldn't the comprehensive car insurance policy for it? If you were to fall and hurt yourself; your medical insurance will pay for your hospitalisation costs so what use is a personal accident insurance policy?

We break it down for you!

What it Covers

A personal accident (PA) insurance policy typically offers you protection against injuries, disability and death caused by accidents anywhere in the world*.

Policies should pay for surgery and hospitalisation expenses, funeral expenses and temporary or permanent disability. How much you get in monetary value often depends on the terms of your policy.

You may notice that your PA policy also covers medical and hospitalisation expenses. This differs from your regular medical policy because the cause of your injury must be an accident of some kind in order to claim from a PA policy. A medical insurance policy will not usually discriminate against cause (save for self-inflicted harm which, of course, no insurance will cover).

What Does it Not Cover?

A PA policy is limited to events, and injuries caused by accidents and not any other eventuality. The policy will not cover your injury if it has been caused by self-injury, war, terrorism, cases of provoked violence and other exclusions as per your policy.

Many people with high risk jobs will also find it difficult to find a PA that will cover them. If they do find a willing insurance provider, premiums will tend to be on the high side.

Will My Policy Cover Property Damage?

A lot of accidents tend to involve property damage of some kind. If you were in a car accident, your vehicle will sustain damage. If you fell during a walk to work; you may have busted your cellphone or laptop.

Will your PA policy cover the loss as well?

The short, general answer is no. However, some policies offer specific cover for certain types of losses such as snatch thefts and liability to another person (in case you knocked someone over and they broke their smartphone).

For the most part, a PA Plan is to protect you from bodily harm; your person; hence the name of the policy. Property cover is often separate.

However, considering how competitive insurance policies have become, you may be able to add a rider on to your policy to cover limited amounts of property damage. Do speak to your agent to find out if such an option is available to you.

What Else Do I Need to Know?

PA insurance is renewed annually and thus, premium payments are usually on a per-year basis. You would also have to register a beneficiary whom you would like to receive the lump sum benefit upon your death.

PA insurance can be purchased for yourself, as a group for the family or together as husband and wife. Some companies also choose to take out PA insurance for their staff if the job is particularly hazardous and a special policy is required.

Should I Get a Policy?

You might be wondering what is the point of a PA when the benefits seem to overlap with other insurance plans you have such as car insurance or medical insurance.

PA policies are helpful primarily for the following reasons:
1) Coverage is worldwide. This may not be the case with your medical insurance policy.
2) For people who have only purchased Third Party Car Insurance or if you do not drive but are involved in a road accident (especially useful in the case of children and the elderly).
3) An all-in-one disaster policy if for any reason you cannot afford full-fledged medical AND life insurance (not an ideal situation but happens!).
4) Covers public transport accidents such as planes, trains and the like.

These are just some of the reasons you may want to protect yourself with a personal accident insurance policy. For some however, having more than one cover is preferred to protect against any and all of life's eventualities.

Whatever you decide, do make the effort to talk to your agent if in doubt and read the terms of your policy carefully. An informed decision is the best decision in every scenario.

*The description above is the general terms of a PA policy. However, depending your insurance company, hybrid or differing products may be created to suit demand and price. Do check with your insurance company for specific details pertaining to your policy.


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