02 Aug 2020
In the context of death/TPD coverage, personal accident insurance only pays out in the event of an accident. If you pass on due to illness or natural causes, there won't be a payout. A term plan would pay out under any circumstances, including accidents.
Most people would get a term plan to cover liabilities/dependants, as one will not know how they might pass on. Personal accident plans tend to be bought more for coverage along the lines of TCM treatment, outpatient accident costs, infectious diseases and the like. As the range of coverage is quite well defined and more restrited, premiums tend to be a bit lower than a term plan.
You can definitely consider a personal accident plan if you have sorted out your CI/death/TPD/hospitalization cover already. It's beneficial to have, but if your budget is tight, focus on your core coverage first.
Personal accident insurance offers a lump sum payout for accidental death and dismemberment, burns etc. It also reimburses costs for treatment for accidental injuries for chiropracter, TCM visits etc.
Term insurance simply gives a lump sum payout in the event of death or TPD. Quite straight forward.
The key difference here for PA plans is that the lump sum payout for death has to be accidental in nature before it's claimable while for term insuance, the cause of death is a lot looser here (of course, please refer to policy summary for more info). Also, PA plans have a reimbursable nature for some treatment while term plans in general don't have that.
In general, term life insurance will take more priority over PA plans. PA plans are great to have depending on your lifestyle, especially so if you work out, exercise a lot. And often, PA plans are not subject to medical underwriting while term insurance have that element in it.
Do consult a licensed financial advisor to explore your options. Term insurance is great for hedging against a liability and for ensuring you have something to leave behind in the event of death to cover your essential working years.
Financial planning is an integral part of life. You can reach me here to find out more.
Term life insurance will pay out a lump sum if you die, become totally and permanently disable...
Read 4 other comments with a Seedly account
You will also enjoy exclusive benefits and get access to members only features.
Sign up or login with an email here
Write your thoughts
NTUC Income IncomeShield Integrated Shield Plan
NTUC Income IncomeShield Integrated Shield Plan Preferred
LIMIT PER POLICY YEAR
180 / 365 days
PRE & POST HOSPITAL
Raffles Shield Integrated Shield Plan
Prudential PRUShield Integrated Shield Plan