Why You Need Personal Accident Insurance
There are many insurance policies that you can buy for unexpected situations in your life. Some of the most popular policies relate to health and safety. Apart from hospitalization, treatment and critical illnesses, personal accident insurance is another related policy to consider.
What is Personal Accident Insurance (PA)?
This is a type of policy that provides financial compensation in the event of an unexpected incident. These unplanned incidences can result in injury, death or disabilities. In Malaysia, there are many PA policies offered by various providers, and their coverage varies from one to another.
In general, a policyholder will be insured against permanent or temporary physical disability, work related injury, injuries or disabilities from traffic accidents and accidental death. In cases where medical treatment is needed, the costs will be covered as well.
Insurance providers will usually provide a lump sum in cases where these unexpected incidences mean a loss of income. Additionally, there are policies that also provide education funds for the policyholder’s children, and funeral expenses in the case of death.
The cost for each PA policy depends in several factors, including:
The types of coverage provided
The maximum sum assured ( the maximum amount that will be paid out)
The age of the policyholder
Whether the policyholder is a smoker or non-smoker
The job held by the policyholder. Certain jobs are considered as having higher risks for accidents.
The policy term.
Accidents that cause injuries and disabilities can happen at work, on the road, acts of violence, natural disasters and so on.
How are PA Policies different from SOCSO?
Personal Accident insurance sounds a lot like something that we all have if we’re employees, which is SOCSO contributions. SOCSO functions almost like an insurance policy too. It covers injuries, illnesses and disabilities from work related accidents. Contributions to SOCSO are mandated by the government, and it comes from both the employee ( 0.5% of their salary) and contributions from the employer.
Unlike SOCSO, PA policies have a wider coverage. These include accidents and injuries sustained outside of the workplace or those that occur while the policyholder is not working.
Additionally, SOCSO coverage is often limited only to ambulance fees, hospitalization costs and certain types of injuries. PA has a wider coverage of the type of injuries sustained and their causes. PA also covers and pays out for more aspects surrounding the unexpected event. For instance, PAs can provide for the policyholder’s children.
Finally, SOCSO is a mandatory program by the government whereas PA policies are voluntary and paid for fully by the policyholder.
Who Will Benefit From Personal Accident Policies?
In short, PA insurance will benefit anyone who wants to protect themselves and their dependents from situations where there’s a loss of income from accidents and death.
If for instance, an accident prevents you from working and deprives your family from the income you’re earning, this policy provides financial reprieve. Although it is not a large fortune, it will be enough to get your family through hard times until new arrangements or incomes can be found.
Most of the time, experts advise those with high risk jobs to obtain this insurance. Some of the high risk careers include those in the construction industry, aircraft pilots, flight engineers, those who work in mining and much more.
Additionally, you may want to consider getting a PA if:
You work in transportation and spend a lot of time on the road.
Your job is physically risky, such as rescue and emergency personnel.
You’re an athlete or sports enthusiast, especially in extreme sports.
You travel frequently, especially overseas.
You like high risk entertainment activities like bungee jumping, skiing, flying fox, and the like.
You are a senior citizen who may face accidents in your home
You’re a parent that has active children, and you’re worried about being injured while keeping up with them.
How Do I Decide If a PA is For Me?
There are definitely some useful questions to ask yourself if you want to determine if a PA is for you. Here are some of them:
Am I the sole breadwinner in my family and will my family be affected by the loss of my income?
Do I have young children and elderly parents who will be affected if I can’t work or am not around anymore? Can my children still go to school and university?
Am I worried that SOCSO coverage is not enough for my medical bills?
Am I concerned about my safety at my workplace?
Am I able to cover my medical expenses and income if anything untoward incidents?
If you can relate to any of these concerns, then you should consider getting a PA policy.
What You Should Look at When Getting a PA?
When you’ve decided on obtaining a Personal Accidents insurance policy, these are the things that you should look out for to get the best one for yourself. Remember that different policies by different providers offer different coverage and terms.
Policy Coverage and Benefits
Look at the types of injuries, accidents or causes of death covered. See if they fit your lifestyle, hobbies and current job. The type of coverage should be as close to your lifestyle as possible.
Some policies may be tailored to fit different lifestyles, and offer additional coverage for special situations. For example, a policy for frequent travelers may cover accidents/death from airborne and injuries that happen while you’re in another country.
Premiums
Premiums are the monthly or annual fee you have to pay to maintain the policy. It should be within your affordability range.
The Sum Assured
This refers to the one time payout when you make a claim on the policy. Make sure that the sum assured is enough to cover your needs, especially if you can’t work anymore and have lost your income.
Exclusions
It’s important to read the fine print of each PA policy, especially the exclusion clause. This portion lists out the unique conditions whereby an insurance payout cannot be made. Examples include acts of self-inflicted injury, injuries or death as a result of war or military action, injuries under the influence of alcohol/drugs and many more.
Accidents Should Be Taken Seriously
Just like everything else in life, accidents and injuries can happen any time. Furthermore, they can happen in a blink of an eye, and change your whole life. That’s why it helps to be prepared, so that you can protect yourself and your loved ones from financial stress.