A personal accident plan is a standalone plan that provides benefits in the case of accidental death, disability and injury. Besides personal accidents, some personal accident plans cover infectious diseases such as dengue fever, and even COVID-19. Other accident plans provide additional benefits, such as traditional Chinese medicine (TCM) and worldwide coverage, and cover other mishaps like food poisoning.
More people died on Singapore’s roads in 2021 as the number of traffic accidents rose along with the resumption of more activities, according to the Singapore Police Force (SPF). A total of 107 people died in traffic accidents in 2021, up 28.9 per cent from 83 people in 2020. Not to mention the number of casualties due to other unaccounted accidents, such as domestic or sports accidents. Accidents are hard to predict; with an accident insurance, you can better protect yourself and your family.
Accident Insurance can offer you the below benefits:
- Protects Your Income: Having a personal accident plan can protect your income. If you become disabled due to an accident or illness, your insurer would be able to pay part of your salary income for a long time.
- Protects Your Net Worth: An accident plan prevents your savings and net worth from being compromised by expensive medical expenses, as medical costs rise yearly due to medical inflation. Most accident plans cover medical expenses such as surgery and inpatient and outpatient bills. Some plans cover extra expenses like mobility and prosthetics payments and personal liabilities.
- Protects Your Family’s Financial Well-Being: An accident plan protects your dependent’s financial well-being by providing a lump sum or recurrent payment for them in an accident that causes death or Total Permanent Disability (TPD).
Death & Disability Insurance
The insured of this type of insurance can receive a lump sum payment in the event of permanent disability or death due to an accident. This type of insurance is generally more suitable for the primary provider of a family as the financial ramifications resulting from the loss of a breadwinner’s earned income can be devastating for the entire family.
Insurance payouts vary depending on the extent of the disabilities and the terms of the insurance contract. The amount of payout for accident-caused severe physical disabilities, including loss of limb (one or more), loss of vision, or severe burns generally differs from that for relatively minor injuries such as the loss of a joint in a hand or foot.
Accident Medical Insurance
Another type of accident insurance is accident medical insurance. Simply put, this insurance covers medical expenses incurred due to accidents, including outpatient clinics (e.g. registered western medicine or physiotherapy, chiropractic or bone-setting, etc.). Some insurance companies also extend coverage to hospitalisation or surgery due to accidents, as well as psychiatric treatment.
Accident insurance covers qualifying injuries, which might include a broken limb, loss of a limb, burns, lacerations, or paralysis. The benefits usually cover all phases of suffering an accident, from evacuation to hospitalisation and treatment, rehabilitation and recovery. In the event of your accidental death, accident insurance pays out money to your designated beneficiary.
When shopping for a personal accident insurance plan, make sure that the basics are covered. These include accidental death and disability, inpatient and outpatient coverage, as well as daily allowance for hospital stays. Many personal accident plans also include coverage for physiotherapy, chiropractic, and Traditional Chinese Medicine (TCM) treatment costs—which can be very costly.
Health insurance covers you for the immediate treatment that you receive after an accident, while accident insurance covers any financial burden that you incur due to the accident. In other words, since most health insurance policies only cover the expenses of hospitalisation and surgery, if you are injured in an accident but do not need to be hospitalised, your health insurance will not cover you.
Although certain hospitalisation medical insurance policies may include emergency accident outpatient coverage, the coverage is limited to emergencies only, in which case one has to get treatment within 24 hours of the accident in order to avail of benefits.
Factors to consider when choosing an accident insurance plan:
- Age: Most insurance companies set an age limit for accident insurance coverage. People aged 18 to 60 are usually allowed to apply for accident insurance. Some companies opt to lower the minimum age limit to 15 years old, or raise the upper age limit to 70 years old.
- Occupation: Suppose you are a blue-collar worker working in an occupation with a higher risk of getting an accident. In that case, your premiums will be more expensive than your white-collar working peers, who are less likely to have an accident. Some occupations which are exempted from most accident insurance policies include professional drivers, construction workers, aerial workers, athletes, jockeys, etc.
- Medical Coverage: Some policies offer a lump sum payment, which only covers accidental death or serious disability, but does not cover medical expenses such as hospitalisation, bone-setting, or other outpatient services. The extent of medical coverage is an important factor to consider when purchasing an accident insurance policy. That is because if you suffer an accident, you are likely to require long-term follow-up treatment or rehabilitative care.
- Coverage Area: Your accident insurance plan may not cover you in another country. Some insurance companies set out in detail which country or countries in which an insurance policy’s benefits apply, and some list Southeast Asia or Europe as the coverage areas. Therefore one should enquire about a policy’s coverage area before purchasing it.
- Exclusions: Each insurance provider includes a list of exclusions. In most instances, besides death from illness or natural causes, the list includes suicide, participation in criminal activity, war, riots, and military service. Do note that for most accident insurance policies, you should be a ticketed passenger on a regularly scheduled flight for the policy to apply; using any other instruments or vehicles for aerial navigations, that is, if you take a private jet, may not be covered.
- Premiums: Companies look at several factors when calculating your premiums. Some companies determine the premiums according to age groups, that is, separate prices for 10 to 17 years old and for 18 to 40 years old. Some companies determine the premiums based on the amount of coverage, that is, the higher the premium, the higher the coverage. Other companies may use complex formulas to calculate risks by taking into account both age and occupation.
Author
The Bowtie Life Insurance Company Limited is the first authorized virtual insurance company in Hong Kong. Through the use of modern technology and medical expertise, Bowtie offers an agent-free, commission-free and more convenient online platform for customers to quote, apply and claim for health insurance plans.
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