How is personal accident insurance different from term life insurance? Is term life insurance sufficient or should I also get personal accident insurance?

Hi anon,

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.

Hi!

Term life insurance will pay out a lump sum if you die, become totally and permanently disabled or if you get diagnosed with a terminal illness. On the other hand, personal accident insurance will pay out if you die or become disabled after an accident. Personal accident insurance also offers miscellaneous benefits like infectious disease coverage, medical expenses and daily hospital income.
Term life plans can be useful if you want to be able to support yourself or your family if you were to die or become disabled. Personal accident plans can be useful if you work in a hazardous occupation where an accident is more likely (though do note that some insurers raise premiums based on the your occupation) or you have hobbies where an accident may be likely (certain sports activities). If you'd like to learn more about personal accident policies, you can read our guide here. Alternatively, you can learn more about life insurance coverage with our guide here.

As always, you should read the policy wording between the two plans to fully understand what they cover. For life insurance policies, it is also advisable to speak to a financial advisor unless you know exactly the type of coverage you need or are going for a Direct Purchase Insurance plan (these types of policies provide smaller amounts of coverage and you can buy them directly online). ​​​