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Should I Get a Personal Accident Insurance?

There are many misconceptions about how Personal Accident “PA” insurance plans work. Some think that it’s unnecessary if they already have life and health insurance, or that personal accident insurance coverage is just for those with risky jobs or hobbies.

Here are the common questions we get about personal accident insurance—and the answers.

 

1. What are the benefits of personal accident insurance?

Personal accident insurance will compensate a person or their family in the event of an accident. The coverage includes death, total or temporary disability, and hospitalisation and outpatient expenses caused by an accident. Other benefits include weekly income compensation for temporary disability, emergency medical evacuation, and covering repatriation costs.

 

2. What do accident medical expenses cover?

Let’s say you fracture your foot: the costs for treatment include the doctor’s consulations, MRI scans and X-rays, which can cost several thousands of dollars through the course of your year-long recovery. And some may opt for Traditional Chinese Medicine (TCM) for additional treatment, on top of that.

These costs are covered under the “medical expenses” coverage terms in a personal accident insurance policy. (This reimbursement can be made up to a limit.)

In the above scenario, fratures—like many minor accidents—do not require hospitalisation. This means you will not be able to claim for these costs under your hospitalisation medical insurance.

We advise that you check your personal or workplace outpatient medical benefits. If you do not have any outpatient coverage, you might want to get a personal accident insurance with a medical expense rider.

For those who are not eligible for medical health insurance due to pre-existing health conditions, it will be wise to buy this policy with higher limits, since the medical expense rider would help to cover costs for more serious accidents that result in a hospital stay.

 

3. My workplace insurance covers outpatient expenses. Do I still need additional coverage for medical expenses caused by accidents?

The outpatient benefit in workplace insurance policies often comes with limitations and restrictions on outpatient specialist claims. There may be an annual limit for outpatient specialist claims, or an employee has to get a referral letter from a general practitioner first before visiting a specialist.

If you think that there are too many restrictions on your workplace insurance, or you want to visit doctors of your choice outside of their list, you may want to supplement your coverage with a personal accident insurance plan with a medical expense rider.

 

4. Does personal accident insurance overlap with life insurance?

Life insurance covers death by any cause (usually excluding suicides in the first year). This includes death caused by accident or illness. On the other hand, the death benefit in personal accident insurance only covers death caused by an accident.

If a person has both life insurance and personal accident insurance, the payout depends on the cause of death:

a) Death caused by heart attack—only life insurance will pay out.

b) Death caused by traffic accidents—both life and personal accident insurance will pay out.

If a person has purchased sufficient life insurance, it is not necessary for them to purchase the death benefit in personal accident insurance. It is also unwise to assume personal accident insurance alone is sufficient to provide for the family in the event of death, as it may not neccessarily payout in all scenarios.

If a person is unable to purchase sufficient life insurance, due to reasons such as pre-existing medical conditions, or unaffordable life insurance premiums, they can consider personal accident insurance for some form of risk management.

 

5. What else do I need personal accident insurance for?

There are some lesser-known areas that accident insurance covers, such as dengue fever and food poisoning. These scenarios may not apply to all personal accident insurance policies, but these benefits can be found in most policies, although they may not seem strictly defined as accidents as such. (Of course, you can argue that no one gets food poisoning, or tries to poison others with their food on purpose…)

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