Accident insurance, is a type of policy you may like to purchase to insure against the likelihood of you suffering an accident. Personal accident insurance only covers accident’s and will pay you up to 75% of your income should this accident keep you off work for longer than either 3, 14, 30, 60 or 90 days depending on which accident insurance policy you choose.
Benefits of Personal Accident Insurance
Accident insurance covers up to 75% of your income and can offer benefit periods for either 2 to 5 years, or until you reach 65 years of age. This gives you peace of mind knowing should this accident keep you off work for the long term you can have a policy that can cover for the long term. Another great benefit of accident cover is that the premiums are fully tax deductible just like income protection insurance.
What types of accidents are covered by a typical accident policy?
While each policy is different, generally speaking an insurer usually covers you for any bodily injury which is caused solely and directly by accident. Injuries should be externally visible and independent of any other cause. This means that it generally covers you for genuine accidents that may cause you to suffer an injury which stops you from working. This injury has to have been within the last 60 days from cease work date.
Accident insurance policy exclusions
The following is a list of what may be excluded from an accident policy:
- Injuries that are self inflicted, or as a result of attempted suicide
- Some policies exclude dental injuries
- All sicknesses are excluded
Please note: It is essential you check the product disclosure statement (PDS) to check exactly what is or is not covered.
Don’t mistake accident insurance for accidental death insurance
Generally speaking these types of policies are a lot cheaper than a full sickness and accident insurance policy as they only cover accidents. This type of policy is also often known as income protection insurance.
However, an accidental death insurance policy provides you with a lump sum payment should you suffer an accident which solely causes your death. This type of insurance is similar to a life insurance policy in that a lump sum benefit is paid upon death.
These two types of policies should not be confused with each other, as both are very different. Accident insurance pays you as an individual, whereas accidental death insurance pays your beneficiaries or your estate.
Generally accident policies do not require you to undertake any medical tests to get the cover in place and can therefore be put in place fairly quickly.
Accident insurance offers a cost effective alternative to income protection for suitable individuals. However be aware of its limitations compared to income protection insurance
Personal accident insurance policy options, things you need to know before comparing personal accident insurance policies & benefits