6 Things to Look for Before Getting a Personal Accident Insurance

No one likes to think about occurrences like accidents and the possible effects that it would have on you or even your family. However, it is not financially wise to entirely ignore such topics. While you cannot eradicate the chances of getting an accident, it is your responsibility to ensure there are provisions in place in such events. That’s where a personal accident insurance cover comes in handy. It provides coverage for death or disability caused by accident. But before you get it, it’s important that you first understand the nitty-gritty of the insurance policy. Below are things you should look for before getting personal accident insurance.

Sum Assured and Benefits

Many variants typically come with personal accident insurance covers. You can easily get baffled by the long list of benefits. A good starting point is to go with what you want to buy and begin with the sum assured. A good practice is to insure oneself up to 10 times of what your annual income is. This ensures that your family is financially secured in the event of an accident. Most policies have permanent partial disablement, permanent total disablement, and accidental death benefits inbuilt in them. It is also important to consider the add-on benefits when selecting the insurance cover. If you have children, you can select add-ons like child education support.

The mechanism for Benefit Payment

Here, you come across two possibilities. The first one is how the insurance company settles your liability claim, and the second is the weekly benefit option. When selling the insurance cover, the insurance company will clearly define the way the claim is settled. Typically, most of the insurance providers will offer to pay the sum assured in one go or monthly over an agreed period. Some may even offer to pay a combination of the two. If your goal is to provide a monthly income for your family, you should consider the monthly option. If you are still at crossroads on considering which model best suits you, here is a smart tip. Go for the lumpsum claim settlement if you are taking the insurance cover to accommodate immediate financial liabilities.

Exceptions In The Policy

There are long lists of exceptions when it comes to personal accident insurance policies. These include wars and invasions, self-inflicted injuries, losses due to the influence of drugs or alcohol, and participation in military operations. While most of these exceptions seem quite reasonable and obvious, it is important to go through them to make sure that important and possible causes of accidents are not excluded. Some insurance policies opt to exclude occurrences such as terrorism or war-related risk while some providers include it in their covers. According to insurance experts like Tradie Insurance, it is wise to select personal insurance policies that cover death or disablement due to most accident risks.

Family Cover Option

You should opt for a family cover option, especially if your family enjoys frequent trips or outings. There are many accident possibilities during road travel. However, pay keen attention to the amount of the sum assured. The spouse, in most cases, gets a lower sum assured. For many insurance providers, this is typically a predetermined percentage, such as 50% of the applicant’s cover. You should go for a separate policy for your spouse if you find the sum assured to be inadequate for them.

Accidental Hospitalization Covers

The hospitalization cash allowance comes in handy to take care of additional hospital expenses. The policy covers hospitalizations due to accidents under accidental hospitalization. Most insurance providers offer these as optional covers, and they come at a price. If you have a limited insurance budget, you can skip these options. Accidental hospitalization covers are only payable in the event you are hospitalized due to involvement in an accident. Most of these scenarios are already covered in the traditional health insurance plan.

It Is Cancelable

Unlike other covers like income protection, where the insurer is obliged to provide cover as long as you continue paying your premiums as agreed, with personal accident insurance, the insurer is free to cancel the policy. If the insurance provider establishes that you are starting to become more of a risk, he/she can decide not to renew your policy. If you make a lot of claims frequently, the insurer may not renew your policy once it expires.


Eric Reyes is a passionate thought leader having been featured in 50 distinguished online and offline platforms. His passion and knowledge in Finance and Business made him a sought after contributor providing valuable insights to his readers. You can find him reading a book and discussing current events in his spare time.