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Personal Accident Insurance

Worried about taking time off if you get injured? Personal accident insurance could help.

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Accidents happen, and they can lead to significant recovery time. Personal accident insurance covers you if you’re unable to work after an accident, meaning you’re supported financially while recovering at home.

With personal accident insurance, you can claim a monthly benefit or a lump-sum payment, so you can focus on getting better, rather than worrying about paying the bills.

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What is personal accident insurance?

Personal accident insurance, sometimes called personal injury insurance, is an insurance policy that promises to pay a financial benefit if you’re injured in an accident.

It’s designed to alleviate the financial stress that can accompany a serious accident, especially if you’re out of work and facing expensive medical bills, so you can concentrate on recovery.

What does personal accident insurance cover?

Standalone personal accident insurance typically covers a specific list of injuries, including the following:

  • Fractures
  • Dislocations
  • Loss of limbs
  • Burns
  • Some illness
  • Loss of sight

If you buy personal accident insurance as part of a wider income protection package, you may also be covered for illnesses that put you out of work, such as the following:

  • Cancer
  • Paralysis
  • Stroke
  • Demensia
  • Heart attack

Remember, specific benefits will vary between insurers, so be sure to read your policy wording carefully before buying personal accident insurance.

How does personal accident insurance work?

You pay a monthly fee and, in exchange, your insurance company promises to pay a financial benefit if you ever suffer a serious injury.

If you buy standalone personal accident insurance, you’ll likely get the financial benefit as a lump-sum payment upon injury. For example, you may receive R25,000 if you break your arm.

However, if you buy personal accident insurance as part of a wider income protection policy, you’ll receive a monthly payment that is designed to replace a portion of your typical income while you’re unable to work.

When you buy your policy, you also set a waiting period and a benefit period.

  • Waiting period. This is how long you have to wait after your injury before you can begin claiming. For example, you might set a waiting period as short as two weeks or as long as three months.
  • Benefit period. This is the length of time you can claim the benefit for. Usually, the maximum length you can claim monthly benefits is either two years or five years, depending on the insurer.

Types of personal accident insurance

There are several types of personal accident insurance. You can buy cover as a standalone product or as part of a larger income protection package. If you buy personal injury insurance as part of a wider policy, you may also receive a financial benefit for illness rather than just for injury.

The table below shows the four types of personal accident insurance, what’s typically covered under each policy and the type of payment you’d receive if you ever had to claim.

Type of coverWhat’s covered?Payout type
Standalone personal accident insuranceSpecific injuries due to accidents – e.g. fractures, burns and dislocations.Lump sum
Total Permanent Disability (TPD) coverInjuries and illnesses that leave you totally and permanently disabled.Lump sum
Accident-only income protectionInjuries that put you out of work temporarily.Monthly income replacement
Income protectionInjuries and illnesses that put you out of work temporarily.Monthly income replacement

Do I need personal accident insurance?

What would happen if you were suddenly injured? Maybe you fell off your bike and broke your leg or were hit by a car while crossing the road.

Would you be out of work for a while and have to face medical expenses? Would your family fall behind on the bills or have to go into debt to cover healthcare costs? Would you need to hire someone to help around the house or pick your kids up from school?

If you answered yes to any of these questions, it might be worth considering personal accident insurance.

What isn’t covered by personal accident insurance?

In certain circumstances, you may suffer an injury but will be unable to claim on your personal accident insurance. These circumstances include the following:

  • If the injury was the result of drug or alcohol abuse
  • If it happened while you were committing a crime or in jail
  • If you injured yourself intentionally

Is personal accident insurance the same as income protection?

No. Personal accident insurance pays you a lump sum if you’re ever seriously injured. You might break your arm and be able to return to work the next day, but you’d still get your benefit.

Income protection insurance pays you a monthly benefit if you’re ever too sick or injured to work. For example, if you were diagnosed with cancer and had to take three months off, you’d be able to claim a portion of your typical income as your benefit.

How does age affect personal accident insurance?

  • All personal accident insurance policies have minimum and maximum age requirements.
  • Some insurers will reduce the value of your benefit as you get older.
  • Your premiums will likely get more expensive as you grow older.

What affects the cost of personal accident insurance?

If you buy standalone personal accident insurance, you’ll typically pay a set price depending on your age. For example, you may pay $20 per month up until the age of 65. After that, your premiums may increase at a steady rate for every subsequent year.

If you buy an income protection policy that includes cover for illness as well as injury, your premiums will be calculated taking a range of different factors into consideration, including the following:

  • Your age
  • Your overall health
  • Waiting periods
  • Your income
  • Benefit amount

How do claims work for personal accident insurance?

If you need to make a claim on your personal accident insurance, you should contact your insurer as soon as possible as each company has a slightly different claims process.

Typically, you’ll be asked to supply some documents before your claim can be approved. These may include the following:

  • A doctor’s note or medical statement
  • An x-ray or CT confirming your injury
  • Proof of ID, such as a birth certificate or driver’s licence

Once you have given your insurance company the documents it needs, your claim will usually be processed and approved within a few days.

Remember, if you have any questions about how the process works, don’t be afraid to ask. Your insurance company will explain everything to you, so you know exactly what to expect.

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