Compare and Find the Best Personal Accident Insurance in Australia
If you’re self-employed or a contractor you might not be covered under workers compensation, and with no sick leave to fall back on, it is your responsibility to protect your income.
Personal accident insurance covers you against injury, caused by an accident, which renders you unable to work. This gives you peace of mind knowing your income will be protected should an accident keep you off work for an extended period. Many Australians who work in high-risk occupations or have pre-existing medical conditions are not able to find affordable income protection insurance, and thus accident only income protection might be a suitable alternative.
If you’re self-employed or have a health issue that prevents you from getting income protection insurance, and need protection against home and work-related injuries, then an individual accident insurance policy might be for you.
Take note; Accident Only Income Protection from life insurance companies differ from Personal Injury Insurance offered by general insurers.
Personal injury policies from general insurers
Generally, accidental injury insurers pay a lump sum benefit if you suffer from one of the injuries listed in their product disclosure statement (PDS). For example, a fractured arm, severe burns or a broken skull. The lump sum benefit amount differs depending on the type and severity of your injury.
This policy type is usually more difficult to claim for because you'll need to meet precise definitions.
Benefits of personal accident Insurance
Accident only income protection covers up to 75% of your income and usually offers benefit periods for either 2 to 5 years, or until your age 65, depending on the insurer. The type of insurance usually offers the following benefits:
- Continue to pay your bills, mortgage and other day-to-day expenses.
- Premiums are fully tax deductible just like income protection insurance.
- More cost effective. Generally, these types of policies are a lot cheaper than a full sickness and accident insurance policy as it only covers accidents.
- Guaranteed acceptance is possible because accident only income protection insurance is not typically medically underwritten.
- Worldwide cover, 24/7.
Read your insurers PDS, as above benefits will vary from company to company.
Accident only insurance protection for your income is usually purchased by:
- Contract workers,
- Small business owners,
- Sole traders,
- People that do not qualify for income protection insurance.
Unlike life insurance, accident only insurance pays you as the individual, not your beneficiaries. While it is a policy benefiting the insured person, personal accident insurance also helps you to continue to provide for your family, covering up to 75% of your earnings.
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The accident must render you unable to work for a specific period, indicated by the waiting period in your policy documents, this can be 14, 30, 60, 90 or 180 days, depending on the insurer.
Take note that people with dangerous occupations might pay a higher premium because of their increased risk of injury.
Indemnity or agreed value accident insurance
Personal accident insurance policies usually only offer indemnity cover, where you provide proof of income at claim time.
The following is a list of the most common exclusions from an accident only policy:
- Injuries that are self-inflicted, or because of attempted suicide.
- Some policies exclude persons being in an aircraft if not as a passenger.
- All sicknesses and pre-existing conditions are excluded.
- Acts of war and terrorism.
- Being under the influence of drugs or alcohol.
- Participating in professional sports.
- Some insurers will exclude dental injuries.
Please note: It is essential you check the product disclosure statement (PDS) and determine exactly what is and is not covered.
How much personal accident insurance should you have?
The amount of individual accident insurance you need is dependent on your annual salary and what you expect your future to look like:
- Do you have a family or are you planning to get married and start a family?
- Are you currently paying a mortgage or want to invest in property?
- How much money do you need every month to maintain your current lifestyle?
- Do you have savings that you can easily access in times of need?
After answering these questions, you should have a pretty good idea of the amount of cover you need. However, it’s best to check with your broker and what their calculations reveal.
The best personal accident insurance policies in Australia
If you are involved in such a severe accident that you are unable to work for a period, then the best individual accident insurance policy is one that will help replace your lost income, so you and your family do not have to suffer financially while you focus on recovering.
Some Australian insurers offering accident only income protection, include:
- AIA accident only income protection provides a monthly benefit if you become disabled due to an accidental injury only.
- CommInsure Essential Cover offers income protection for accidents only if you do not qualify for full income protection because of your health.
- Asteron Life income protection accident only cover offers benefit periods of 2 years, 5 years and to your age 65.
- ClearView accidental income protection cover provides a monthly benefit of up to 75% of your regular income.