Tuesday, November 27, 2012

Personal Accident

Personal Accident (PA) insurance is consider one of the most important insurance protection not only because it is very affordable but the possibility of claiming from a personal accident insurance protection is higher than natural death or critical illness claim. 

PA coverage protects you from accidental risk - any injury or death caused by accident. You can make a claim from losing an arm or accidentally cutting of a finger while preparing your meal. However, do not mistaken with Total and Permanent Disability (TPD) protection.

TPD is usually defined as:

(a) Becomes permanently and completely unable to engage in any occupation and is permanently and completely unable to perform any work for remuneration or profit.

(b) is deemed to be caused by any of the following:

i) Totally and irrecoverably loses sight in both eyes.
ii) Totally and irrecoverably loses by severance one limb each at or above his wrist and ankle, or two limbs at or above his wrist or ankle.
iii) Totally and irrecoverably loses sight in one eye and totally and irrecoverably loses by severance one limb at or above the wrist or ankle.

(c) Or by unable to fulfill any 3 of the following activities:

i) Transfer 
ii) Mobility
iii) Continence 
iv) Dressing 
v) Bathing / Washing
vi) Eating 

From the definition above, it is not easy to fulfill the TPD's requirements. If you happen to lose only one arm in an accident, your TPD protection will not provide any payout. The chances of involving in an accident are way much higher than any other risks that we might face every day.

One more reason why you must have a Personal Accident protection in your risk management portfolio is that the premium is super cheap! The insurance charges rate is the same from the day you were born till the day you leave Earth. Oh, there is a maximum entry age though, usually age 55.

Here is an example of Personal Accident protection premium rate.

Due to space, table above only shows the Principal Sum Insured. There are 18 other benefits in the protection.
Source : www.allianz.com.my

As you can see from the table above, a RM240,000 (with 18 other benefits including Weekly Benefit) Personal Accident protection cost only about RM358 a year. That is RM29.83 a month and it is renewable at the same rate as long as you can afford it.

So, you should seriously look into your policy documents to check if you have a Personal Accident Protection either attached as a rider or a stand-alone plan. You might want to check with your employer to see if they have a Group PA for staff. PERKESO (SOCSO) benefits should be given by your employer too. However, there is a limit to the benefits covered. For more information on PERKESO, visit PERKESO.

I would recommend at least a RM500,000 of Personal Accident protection for a 30-year old working adult. If you are married, why not consider getting a Family Package for your spouse and children since it is usually cheaper this way.

Not to forget, some credit cards or telcos even give free Personal Accident protection for a year at absolutely no cost to you!

Contact us if you want to add on Personal Accident Protection into your portfolio.


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