Personal Accident Insurance – think again
This is part two and final part in our topic on “ Personal Accident Insurance ”. If you have missed part one the article, we encourage you to read it here. It will help you with a better understand with the entire topic. If you are ready, we can proceed with today’s article of “Personal Accident Insurance – think again”, This article will explore come important and critical pointers that will come handy when you decide on your next Personal Accident Insurance plan. So, let’s begin….
Indemnity Vs Non-Indemnity Insurance Plans
Most insurance plans are not designed for the insured to make a profit. Instead, they are designed to help you offset your costs and lost. Let’s take an example, John the insured in admitted in a hospital and the total medical hospitalization bill is $2K. At the same time, John has two hospitalization plan each with a limit of 2K. Does it mean he received 2X2=4K? No. He will only receive maximum 2K from both the plans. Either he can claim 2K from Insurer A or 2K from Insurer B or Claim 1 K from each of Insurer A and B. He can never claim 2K from each insurer. Always remember, hospitalization plans, no matter how many you have, will only pay you the cost you incurred during your hospital stay.
If John has 2 life insurance plans with each sum assured with 100K, and in the event of total permanent disability or death, his family can claim from both these plans, that is, 100k X 2plans = 200K in payout.
Likewise, if John has 2 personal accident insurance plans and if he met with accident or total permanent disability due to accident, he can claim from both these plans. The greatest benefit of personal accident insurance plan is its ability to cover your medical cost for almost any kind of accident, big or small. This is why personal accident insurance plans are usually regarded as a useful complement to other existing insurance policies.
Usual Personal Accident Insurance Plan Coverage
Generally, most personal accident insurance plans in the market will cover the insured for the following conditions and some may even cover much more.
# 1 Death Benefit: a lump sum pay out in the event of death arising of death and not natural cause.
# 2 Permanent & Partial Disability: Usually lump sum payout for TPD (total permanent disability) arising from accident and partial payment for other types of disabilities arising from accidents.
# 3 Weekly Income Benefit: If the insured is employed and due to his injury, he is not able to attend to his employment work, the insured can be paid a weekly sum for X number of weeks.
# 4 Medical Expenses Coverage: It covers you for your medical expenses and hospital stay cost up to a limit in your plan.
# 5 Daily Hospital Benefit Coverage:Even if you are not employed, personal accident insurance plans will pay you a daily income coverage for X number of days
Who Needs Personal Accident Insurance Plans?
As we know life and health policies provide comprehensive coverage, they do not cover outpatient medical expense coverage arising from accidents. We also know, the probability of us meeting with some form of accident during our life time is more. As such. Personal accident insurance plan is important for everyone. Adults, children, elderly, everyone needs it and more so if you are the sole break winner in the family.
Personal Accident Insurance Plan Premium Costs
Most of us believe in personal accident insuracen plans and you can image this plan to be a door opener or a hot seller from the insurance provide point of view. Due to its large customer pool and also because it does not have a maturity return (like Life or investment plans), the premiums of Personal Accident insurance Plans seem to be lower than even some hospitalization or critical illness plans.
Depending on the nature of work, your premium will vary. For example, if you are in a desk bound job in your office, you are considered to be low risk and your premium can be low. On the other hand, if you job requires you to work from heights or frequently driving on the road, your job is seen as riskier and your premiums can be higher.
What Is Accident in Personal Accident Insurance Plan?
As much, we understand that Personal Accident Insurance plans pays you in the event of an accident, you need to read the fine prints in your policy documents. Why? Not all insurers agree on what does accident means! Each insurer has his own definition of an accident. For example, insurer A may define accident as “A mishap that is visible violent and external” … it also means, he will not pay if the injury in internal with no swelling! Another insurer can define accident as “anything that is not planned for …”, this means, this insurer will even pay for your food poisoning bills? Always, read the fine lines in your policy and ask your insurance agents as much questions possible to clarify your doubts.
Word of Caution
Through this article, we are not marketing, suggesting, influencing you to make any form of decision pertaining your insurance. Instead this guide is to be seen as a general information only. You are highly encouraged to discuss with your authorized insurance agent should you have any doubts.