Most people think of insurance coverage for Personal Accident (PA) as something that is non-essential and unimportant.

They can’t be blamed, because even insurance salespeople including agents and bank telemarketers do not understand the importance of a PA policy. Most would focus on selling the relatively low cost of the policy, and the benefits of being able to claim for certain medical expenses.

I myself was not covered by any PA policy until 2.5 years ago when as a favor for my help, a friend who works as an insurance agent bought me a PA plan as a gift. (Editor: Can I be his friend too?)

Even then, all I knew about the plan was it allowed me to claim medical expenses in the event of an accident, even if it meant going for alternative medicine, such as a Sinseh. (Traditional Chinese Medicine Practioner)

But as I joined the industry, I realized that a PA plan is not just a medical reimbursement policy. Beyond medical reimbursement, it also covers accidental death, partial dismemberment, hospital income, and total permanent disability. As I always share with my colleagues, there are only 3 major ways to die – Old age, major illness, or an accident. Statistics reveal that approximately 1 in 20 Singaporean, die in an accident. So, do you now realize, how important PA insurance is?

Ed: 5% of Deaths caused by accidents? That is a significant statistic.

Here are more reasons why you need PA.

1. Medical Reimbursement flexibility

As mentioned, most PA policies allow you to seek medical reimbursement in the event of an accident. You might think that this is not very much different compared to a hospitalization policy. However, the key difference is, you do not need to be hospitalized to be able to claim from your PA policy. It’s also not limited to any medical institution nor geographical location (worldwide).

You might have suffered a fracture that requires an MRI to be done, yet it’s not serious enough to warrant a stay at the hospital. That would have cost you well over a thousand dollars, and adding on the subsequent consultation fees, it’s not a bill one would like to be burdened with.

Case in point

Recently, a friend approached me to plan for a Life policy. After going through his needs and a budget, I proposed a Life policy with a PA rider – the policyholder gets a discount for his PA policy when it’s tagged on as a rider to a Life policy. He was hesitant at first, choosing to use his spare budget for a higher sum assured. While that could mean a higher commission for me, I was insistent on my original proposal which provided for a well-rounded protection and he took the recommendation.

Just a week after the policy was in-forced, I received a text from that very friend. He had just sprained his thumb while trying to break a fall and was wondering if he’s covered by any insurance. The bill which included a visit to the orthopedic and a TCM practitioner amounted to over $300. Had I not insisted what I thought was the best policy for my client, he might not have been covered adequately.

2. Accidental Death, Partial Dismemberment, and Total Permanent Disability. All covered in one plan.

Most people who think insurances are scams might have heard of stories from people who could not claim from their Life Insurance policy for a permanent injury such as the loss of an eye, an arm, or a leg.

While unfortunate, these injuries do not fall under the definition of a Total Permanent Disability in a Life Insurance policy. In fact, a PA policy is the only insurance which pays out for a partial dismemberment down to the loss of a finger or a toe. Payouts range from 1% to 150% of the sum assured.

Ed: Classical definition of Total Permanent Disability requires at least 2 of the above: Loss in Sight in one eye, one arm, or one leg. One macabre (but easily understood) way of explaining it was: Place your eyes, hands and legs in a bag – only when 2 are rendered unusable, is TPD then claimable. 

3. Low-cost plan with coverage when you need it most

While your family might suffer financial hardship without you around, their financial wellbeing could be worse if you were bedridden and are unable to provide for yourself and your family.

For less than a dollar a day, a PA policy provides a $100,000 sum assured, with all the above benefits and more. It is truly a hidden gem in the world of financial planning.

Moral of the Story: Plan your Coverage

Fundamentally, most personal accident policies offer you protection from … (drumroll)…  an accident. However, the benefits vary from plan to plan, and it is important to discuss your needs with your financial planner.

He or she might be able to review your policies to ensure that you have decent coverage for your limited budget. For example, if you’re self-employed, you might want to be covered for a temporary disability income if the accident leaves you out of work for an extended period.

And because accidents can happen so frequently, it is also important to obtain your protection from a representative that you can count on being there for you – the last thing you want to do when something happens is having to go to the counter or going through answering machines.

About the Author

Kaiyan is a Life Planner with Great Alliance, Representing Great Eastern Life. His philosophy in financial planning is ensuring that people plan a financial safety-net where they need it most. He is a Qualifier of the Great Eastern Life Achievers Club 2017 and a member of the Insurance and Financial Practitioners Association of Singapore (IFPAS).

In his spare time, Kaiyan loves reading, traveling and volunteering with help groups.

Contact Details

Leong Kaiyan

Tel: 9006 9006

Email: leongkaiyan@rep-sg.greateasternlife.com

We thank Kaiyan for taking the time and effort to pen his thoughts and experiences. If you have a story to share, we would love to hear from you as well! Reach out to us here.

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.