Now that you are a working adult and responsible for your own financial planning, it is important to ensure you have adequate insurance protection.
You might already know about the importance of having medical insurance to cover your hospital bills should you fall ill. But medical bills aren’t the only thing to worry about if something unfortunate should happen to you.
Personal accident insurance is another type of insurance you might want to consider. It can offer you and your family a much-needed layer of financial protection should you suffer from accidental death or total and permanent disablement.
What is personal accident insurance?
A serious illness isn’t the only thing that can render you unable to honour your financial commitments. An accident that kills you or makes you unable to work would be financially disastrous, especially if you have family or dependents that rely on your income to survive.
Personal accident insurance is meant to protect you and your family from such an incident. You are typically insured for a certain sum of money which will be paid out in the event of accidental death or total and permanent disablement. This is usually paid out in a lump sum and can be used to reduce the financial burden as a result of your lost income.
A good personal accident insurance policy might also offer coverage in some other areas, such as reimbursement for medical expenses incurred due to the accident or compensation for lost income.
How is personal accident insurance different from medical insurance and life insurance?
Personal accident insurance and medical insurance actually offer coverage in two different areas, so it is important not to confuse the two.
Medical insurance is designed to offer coverage for medical bills should you get hospitalised. It is thus essential to protect you from serious and expensive illnesses.
While personal accident insurance might also offer some coverage for medical bills incurred as a result of injury, it is principally designed to offer financial support in the event of accidental death or total and permanent disability. This financial support is typically used to offset the loss of income resulting from death or inability to work.
Like personal accident insurance, life insurance also offers a lump sum payout that can help with living expenses of your dependents or yourself in the event of death or total and permanent disability.
The key difference is that life insurance offers this payout no matter the cause of death or total and permanent disability, while personal accident insurance only does so if the death or total and permanent disability is the result of an accident.
However, life insurance policies typically have more conditions attached to them, such as a stipulated term length in the case of term life insurance. You commit to paying premiums for the entirety of the term life insurance policy. Conversely, you will not get a payout if you die or become disabled after the term is over. Personal accident insurance, on the other hand, is more straightforward and can be purchased from year to year as a standalone product.
Do you need personal accident insurance?
Personal accident insurance is something you should consider if you have dependents such as children, elderly parents or a non-working spouse who rely on you financially. If you pass away due to an accident, your dependents will receive a payout that they can use to support themselves.
Protect yourself from the unexpected with personal accident insurance from HL Assurance.