Thom Yorke was right when he sang the verse “we are accidents waiting to happen.” Well… at least in my case because I can’t walk to the restroom without stubbing my toe every time. But accidents can and do happen. It doesn’t matter whether you’re operating heavy machinery, hiking in Tibet, riding the bus, or even taking a shower. And if you’re uninsured against injury or death from accidents, it could prove disastrous for your finances.
What Is Personal Accident (PA) Insurance?
PA Insurance provides you and your family with financial support in the event you suffer an injury, disability, or die from an accident. Although it sounds similar to a life insurance policy, PA Insurance differs from life insurance in two ways:
- PA Insurance is meant to cover death directly resulting from accidents, not death from natural causes, while life insurance covers both.
- Unlike other life insurance policies that provide savings/investment benefits in addition to any death benefits, PA Insurance offers no such benefits.
Some industries such as transportation, manufacturing, and construction have a greater chance of on-the-job accidents and deaths – that’s something to think about if you operate heavy machinery or drive daily. And if you don’t qualify for Workmen’s Compensation or are uninsured, a Personal Accident (PA) Insurance policy can protect you for $200 – $300 a year.
What Constitutes an “Accident?”
Understanding what the definition of “is” is doesn’t just apply to former US presidents and their ah, indiscretions. It also applies to PA Insurance in determining what constitutes an “accident.” Unfortunately, some policies are written in a confusing manner that makes Shakespeare easy to read by comparison.
Fortunately, insurers follow the same general principles when it comes to defining “accident” – it’s an unforeseeable event that causes injury at the moment of its occurrence. But if the “accident” was caused by a cumulative effect, it’s not considered an accident.
For example, if you routinely skip work to play golf (government job right?) and that “nagging” pain in your elbow and Achilles heel turns into a debilitating injury, it’s not considered “accidental” by insurers, but cumulative.
What Does Personal Accident (PA) Insurance Cover?
PA Insurance covers a variety of incidents with payouts being determined by the extent of the accident. You can find the “scale” used by insurers to factor beneficiary payouts in your policy documents or on the insurer’s website by viewing the PA Insurance policy’s Terms & Conditions page.
For example, depending on whether you lost your pinkie in an accident or worse, you could either receive a lump sum payout or weekly benefits.
Here are the incidents PA Insurance covers:
If you’re not a fan of deadlines (no pun intended), you’re probably not going to like this one. Death benefits offered by insurers come with a time limit stipulating that you must die within a certain time frame before your beneficiaries can make a claim.
Many insurers specify that you must perish within a 12-month period from the date of an accident for your dependents to receive the full insurance payout. But first, the insurer will determine whether an accident was the ultimate cause of your death.
Here’s how an insurer gives the OK on death benefits:
- Approved: If you accidentally fall and break your leg while trekking in Malaysia, but catch pneumonia while waiting for medical evacuation and die from it, your beneficiaries would receive the death benefit payout. That’s because it was the accident that led you to catch pneumonia.
- Not Approved: If you caught pneumonia from another patient while recuperating at the hospital and died as a result – your beneficiaries wouldn’t receive the death benefit payout because it was the illness you caught at the hospital, not the accident that caused your death.
Permanent Total Disability
If you become permanently and “completely” disabled as a result of an accident, you’ll receive a lump sum payment. Like accidental death coverage, there’s also a time limit involved (usually 12 months from the date of the accident), whereby you’ll receive benefits if you become completely disabled within that period.
Insurers define total disability as a condition that prevents you from working ANY kind of job, even something as simple as a desk clerk or data entry.
For example, if you’re a pilot involved in a career ending accident that diminishes your eyesight, but doesn’t eliminate it, you wouldn’t qualify for permanent total disability because you’re still able to perform other jobs.
Insurers consider the following as permanent total disabilities:
- Loss of sight in both eyes
- Loss of both hands or feet
- Loss of any combination of the above (ex. one foot and sight in one eye)
- Loss of both hearing and speech
Partial Permanent Disability
Insurers also provide benefits in the event that you completely/partially lose one of your limbs. But the amount you’ll receive is only a percentage of the full sum you’re insured for. For example, if you lose a thumb in an accident, you might receive 20%. But if you lose an arm, you’ll receive 50%. But if an accident literally cost you an arm and a leg, you’ll get 100%.
The benefits you’ll receive for permanent partial disability varies by insurer. To find the percentage you’ll receive for the complete/partial loss of a limb, check the insurer’s compensation table.
Some accidents might leave you “temporarily” disabled – meaning you still retain all of your limbs (thankfully), but the accident left you unable to perform the daily duties of your profession.
For example, if you’re a surgeon who fractured a finger playing basketball, you’d be entitled to collect temporary disability benefits because you’re unable to perform surgeries until you’ve recovered.
Benefits for temporary disability are given in weekly cash payouts for up to 104 weeks, not in a single lump sum like you’d receive if you suffered total permanent disability.
Insurers have two levels of temporary disability:
- Total Temporary Disability: If an accident leaves you completely unable to do your job, you’d qualify for maximum temporary disability benefits.
- Partial Temporary Disability: If an accident leaves you only partially able to do your job, you’d qualify for only half of the temporary disability benefits.
Your PA Insurance policy also covers some of the medical expenses you’ll need to pay after an accident. However, there are limits to how much the insurer will pay and how long it will provide medical expense benefits. These limitations vary by insurer, so be sure to factor medical expense coverage when choosing a PA Insurance provider.
In general, insurers cover the following expenses:
- The cost of medical treatment such as surgery or remedial care for accidents only. Illnesses (heart attack, stroke, etc.) are not covered by PA Insurance.
- The cost of medical mobility aids such as wheelchairs, canes, and crutches.
Extra Accidental Death Benefit (Double Indemnity)
If you die as a result of an accident while on board public transport as a fare-paying passenger, your beneficiaries will receive twice the death benefit (double indemnity).
Make sure you check the fine print on any extra accidental death benefit listed by insurers. That’s because there might be stipulation stating that your beneficiaries will only receive twice the death benefit if the accident happens on a weekend or holiday. So be aware of those sneaky fine print details.
Daily Hospital Cash
Daily hospital cash is another benefit you’ll find in some PA Insurance policies (you know, in case you want to buy that really cute bear in the gift shop downstairs). Unlike medical expense coverage, this benefit gives you a fixed daily payout (ex. $100 a day) up to a certain number of days (ex. 50 days per policy year) for inpatient care.
Of course, to qualify, you must have been sent to the hospital as a result of an accident and not illness or pre-existing condition.
Medical Evacuation/Return Home
Having an accident overseas while on holiday or business can be an expensive event – especially if your destination lacks the medical facilities or expertise to treat serious injuries. But some PA Insurance policies will pay the cost of moving you from your location to the closest medical facility that can treat your condition.
This is extremely useful if you frequently visit remote destinations on holiday or business – as the cost of emergency air transportation can easily cost tens of thousands of dollars. Additionally, if you need to be moved back to Singapore for additional treatment, that’s covered too.
But if you pass away overseas, the insurer will cover the expense of returning your body back to Singapore… unless you happen to die on Mt Everest.
Where Can You Get Personal Accident (PA) Insurance?
It’s easy to get a PA Insurance policy. In fact, you can probably incorporate it into one of your other existing insurance policies as an add-on. For example, your car or mortgage insurance policy might offer PA for an additional fee on your premium. Even credit cards now offer PA Insurance as a user benefit for a monthly fee or even free of charge. Follow us on Facebook as we explore other avenues in which you can make sure you are adequately protected.
If you are interested in getting Personal Accident coverage, you can find out more here.
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