Personal Accident Insurance Vs Life And Health Insurance
This article is brought to you by Standard Chartered Bank (Singapore) Limited (“SCBSL”). All information provided is for informational purposes only and is not intended to be construed as advice or an offer for any product or service. SCBSL is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein.
Nobody expects accidents to happen, but when they do, the consequences can be severe. When debilitating accidents happen, your first worry might be about the lifestyle changes that you will have to undergo.
However, you will also have to take into account the possible financial downsides, which can be devastating.
When such accidents happen, you will need a financial safety net to rely on – here is where personal accident (PA) insurance comes in.
Here is what you need to know about PA insurance, and how it differs from other products in the market.
What is PA insurance?
A PA insurance plan is a policy that provides coverage for accidents. In the event that you become permanently disabled or die due to an accident, a PA insurance plan will provide financial support for you and/or your family.
Comparing PA insurance with life and health insurance
|PA insurance||Life insurance||Health insurance|
|Coverage||Covers you for||Covers you for||Covers you for
|Premium||Based on coverage limit; generally cheaper than life or health insurance||Based on age, medical history and coverage limit||Based on age, medical history and coverage limit|
|Insurance payout||Lump sum; may also provide daily or weekly cash benefit||Lump sum||Based on medical and surgical bills, as well as coverage limit|
|Exclusions*||Certain hazardous occupations, certain sports and activities, pre-existing conditions||Pre-existing medical conditions||Pre-existing medical conditions|
Even though these insurance categories provide similar coverage, a PA insurance plan offers certain advantages over life and health insurance:
1. More comprehensive coverage for accidents
Although both PA insurance and life insurance offer payouts for disability, your life insurance plan may only cover you in the event of total disability. A PA insurance plan will cover you even if you become partially disabled due to an accident. For example, if you have lost the use of your fingers on one hand, a PA insurance plan will provide a payout, whereas a life insurance plan may not.
On the other hand, health insurance covers inpatient and outpatient medical treatment, regardless of whether these expenses were incurred as a result of an accident. However, it will not provide a payout for death or permanent disablement.
In the event of disability, having a lump sum payout under a PA insurance plan is important, as it can help to cover these expenses:
- Loss of income. If you are no longer able to continue working, or face difficulties in finding work, a lump sum payout can provide financial support.
- Assistive equipment or devices. Your disability may require you to use assistive equipment like a wheelchair or a walking aid. These items are not cheap – a wheelchair alone can cost you hundreds to thousands of dollars.
- Home modifications. You may need to make alterations to your home so that it is disabled-friendly. These could include installing rails, altering your bathrooms and widening doorways.
- Services and transportation. Being disabled may mean having to spend more on your day-to-day travelling. Instead of using public transportation, you may need to travel frequently by taxis or private-hire cars. You may also incur expenses related to services required for everyday living, such as a live-in domestic helper or additional home maintenance services.
PA insurance plans are generally affordable. Having a PA insurance plan provides comprehensive accident coverage at relatively low cost. Under Allianz Accident Protect, being covered under a PA insurance plan costs as little as S$0.50 a day.
3. Generally easier to qualify for
Life insurance offers broader coverage than PA insurance, as the payout upon death and disability is not limited to those caused by accidents. However, underwriting is usually required and your application is subject to approval from the insurer.
In contrast, you do not need to undergo a medical examination when you apply for a PA insurance plan – you just need to answer a few declaration and lifestyle questions.
Of course, you need not choose one insurance product over the other. A PA insurance plan can complement your existing life and health insurance by filling in the gaps in protection, offering a greater financial safety net when unforeseen events happen.
When should you consider PA insurance?
While everyone is susceptible to getting into an accident, having PA insurance is especially useful when:
1. Your job or lifestyle exposes you to physical risks
In 2017, occupational risks represented one of the top risk factors for death and disability in Singapore. If your job involves light manual work or operating light machinery, you may want to consider a PA insurance plan. However, check your plan’s policy beforehand, as your policy may not cover certain hazardous occupational activities.
You are also vulnerable to accidents even after working hours, no matter your lifestyle. However, if your lifestyle regularly exposes you to physical risks – say, if you commute by motorcycle – a PA insurance plan can provide a financial safety net for unforeseen events.
2. You or your family need a financial safety net
If your family members depend on you for income, your death or disability may be financially disastrous for them. If you are self-employed or derive most of your income from temporary or part-time job, being out of job while you recover from an accident could also mean a disruption in income. Having a PA insurance plan in place mitigates these financial consequences.
3. You are a senior citizen
As you age, you become more susceptible to death-causing injuries such as falls or transportation related injuries. Having a PA insurance plan means not having to dip into your retirement savings or relying on your family to cover exorbitant medical expenses.
A PA insurance plan offers peace of mind
When the unforeseen happens, the last thing you want to worry about is how you can afford the costs of disability, or how your loved ones will financially manage without you – that is why it is important to get a PA insurance plan that provides adequate coverage for your needs.
With Allianz Accident Protect, you will get a lump sum payout of up to S$300,000 upon accidental death, total or partial permanent disablement to cover you for all types of accidents (T&Cs apply).
The policy also has one of the highest coverage in the market for medical and surgical expenses – up to S$7,500 per accident. In addition, this plan reimburses you with up to S$15,000 for costs related to mobility aids and home modifications prescribed by a medical practitioner.
Allianz Accident Protect also offers these optional add-ons to your policy in the event of an accident:
- Daily hospital cash benefit of up to S$200 a day for up to 750 days. The daily cash benefit doubles for stay in an intensive care unit for up to 90 days
- Recuperation benefit of up to S$200 a day for up to 30 days
- Weekly cash benefit due to temporary disablement of up to S$400 a week for up to 104 weeks
- Child education fund benefit of up to S$100,000 for each child upon your death or total permanent disability
While you cannot prevent accidents from happening, you can protect yourself and your family from its financial consequences.
Allianz Accident Protect is underwritten by Allianz Global Corporate & Specialty SE Singapore Branch and distributed by Standard Chartered Bank (Singapore) Limited.
This article describes the insurance product(s) and service(s) provided by Allianz in alliance with SCBSL. This article is not a contract of insurance and reference should be made to the actual policy for the exact terms and conditions applicable to the insurance policy, which will be sent to you upon the acceptance of your application by Allianz. The insurance product described in this article is a product of and underwritten by Allianz and not SCBSL. In facilitating insurance arrangements or in referring customers to any insurer, SCBSL is acting in alliance with the insurer and not as an agent for customers.
You may wish to seek advice from a qualified advisor before purchasing the policy and in the event that you choose not to seek advice, you should consider whether the policy is suitable for you. If, after purchasing the policy, you decide that the policy is not suitable for you, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by them in underwriting the policy.
This Policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (“SDIC”). Coverage for your Policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Allianz or visit the GIA or SDIC websites (www.gia.org.sg or www.sdic.org.sg).