Asked 2w ago
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.
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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).
Personal accident pays only upon accidental death or disability, and injury must not be self inflicted. Minor body parts such as fingers, phalanges, toes may also be paid out.
It also has a medical reimbursement portion that allows you to claim for minor injuries and infectious diseases which might not be claimable under hospitalisation if not warded/ perform surgery. (animal/ insect bites, X-ray / MRI scans, TCM, Food poisoning, Dengue fever, Accidental dental - chipped tooth/ crowning, physiotherapy) .
Term Life pays regardless of the cause of death / total permanent disability / terminal illness. In the event of death/ disability due to accident, both Term life & PA will be paid out together. Term life is usually more expensive than PA for the same amount of coverage.
The medical reimbursment portion of PA is quite easily claimable (IMO most likelihood of claiming across all policy types) and very common. That is one of the main benefits of having a PA in your insurance portfolio. You don't have to get too much of Accidental death/ disability pay out if you already have a very high coverage under term life. Term life may have stricter medical underwriting as well so some people with health conditions may be unable to take it up, whereas death and disability coverage under a PA may still be bought.
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