What Is Personal Accident Insurance

In its simplest form, a Personal Accident Insurance (PA) policy pays an insured sum upon personal injury, disability, or death that results directly from an accident.

Let's Have Some Examples

Scenario 1

John suffers a fall and unfortunately dies as a result of the fall. This will be payable under a Personal Accident policy.

Scenario 2

John suffers a fall. He survives but is left permanently disabled for life. This will be payable under a Personal Accident policy.

A Personal Accident policy does not pay in the event of death by old-age or critical illness. If you are looking for something that pays for those incidents,  you must look for a life insurance policy instead.

Accidental Death & Disablement At A Glance

Let’s assume you’ve picked up a Personal Accident policy with an insured value of RM100,000. Here’s an example of what a typical Personal Insurance policy would consist of and what you’re covered for;

• In the event of a death caused by an accident, It would pay you RM100,000. 
• In the event of a Total Permanent Disability (loss of both limbs), it would pay you RM100,000 (as a result of an accident only).
• Partial loss of limb(s). There is usually a table or chart detailing the percentage of the payout for this (e.g., the loss of one eye pays 50% of the insured value). 

Add Ons

Most Personal Accident policies also offer additional riders, such as a Medical Reimbursement. This is usually a lump sum payment in the event of an accident. The purpose of this is really to help buffer the medical costs you may incur in the event of an accident. A typical amount differs anywhere from RM2,000 to RM5,000. You can speak to your insurer about some options available for this.

Note that it is a lump sum reimbursement payment and differs from the function of a medical card, which covers your medical bill and typically carries an annual/lifetime limit for claims. If you are looking for something to cover your hospital bills, you would need to look at medical cards instead.

Why Personal Accident Insurance?

The main reason is that Personal Accident policies are very affordable. You can pick one up for as low as RM100/year. That is quite a difference when compared with, let's say, an Investment-linked policy with a medical card attached, which can start from RM100/month.

Personal Accident policies are also easy to apply for and do not typically require any medical examinations by the applicant(s).

Who Is Personal Accident Insurance For?

Anyone on a budget and looking for some level of coverage should consider a Personal Accident policy. Individuals looking for an affordable option to increase their insurance coverage can also opt for a Personal Accident policy as an add-on to their existing coverage.

More Examples

Jane currently has a life insurance policy with an insured sum of RM100,000. She has children and is concerned that the RM100,000 insured sum will not be enough to see them through if anything unexpected happens. She is looking at an additional RM500,000 in coverage.

In this case, Jane can consider adding a Personal Accident policy with a higher cover limit to help complement her current coverage. Due to the affordable premium rates, it would be a much cheaper option than upgrading her life policy.

Personal Accident policies are also popular for companies looking to provide their employees with additional employee benefits and protection. Due to their low cost and affordability, companies are able to provide this benefit to their entire workforce at very attractive rates. These policies are known as Group Personal Accident policies (GPA), and the application process is quite simple and straightforward.

For more information and assistance, book a free consultation or drop us a message.