What do you know about Personal Accident Insurance?

There is an insurance product for almost everything. Health insurance when you get sick, home contents insurance for when you lose a valuable possession (or have it stolen), travel insurance for when you’re overseas, and life insurance for your dependents when you die.

When you get injured Personal Accident insurance, by itself or in tandem with another policy, can provide valuable support to you and your loved ones.

From being involved in an accident on public transportation, to finding yourself the unfortunate victim of a toaster oven mishap, Personal Accident Insurance

What is Personal Accident Insurance?

Personal Accident is a type of insurance policy that will provide you and your loved ones with a lump sum benefit if you are seriously injured.

Related to critical illness insurance and disability income protection, Personal Accident policies can commonly be obtained on a standalone basis, or as a rider on a life insurance plan. Although there may be, on first blush, some overlap between a product like Personal Accident cover and Health Insurance these two types of insurance policy operate in completely different ways.

Health Insurance will provide you with ongoing protection against the costs of potential future medical treatment – no matter what may have caused the medical conditions being treated. Additionally, health insurance can pay your medical provider directly when you require treatment. This is in stark contrast to a Personal Accident insurance policy which provides the policyholder (or beneficiary) with a settlement directly. Furthermore, the claim settlement provided by a personal accident policy is normally a one-time payment following accidental death, or physical dismemberment only.

What does Personal Accident Insurance Cover?

Personal Accident Insurance provides a sliding financial benefit should you be involved in an accident which results in death or dismemberment.

Under most personal accident plans, dying whilst the policy is active will result in a benefit of 100% if the sum assured being paid to the beneficiaries named in the policy’s terms and conditions. From there, Personal Accident insurance plans in Hong Kong will normally specify a list of injuries which can be covered under the policy, with a sliding scale applied to the claims payment.

As a policyholder you can reasonably expect to see the following percentages as an indication of the financial benefit you will receive should you suffer them:

• Loss of, or loss of use of two or more limbs – 100%
• Loss of, of loss of use of one limb – 50%
• Permanent loss of hearing in both ears – 75%
• Permanent loss of hearing in one ear – 15%
• Extreme Disfigurement of face – 15%
• Paralysis – 100%
• Permanent Loss of Speech – 50%

Depending on the insurer and specific Personal Accident Insurance policy you choose to purchase, some of these benefits may be higher or lower. However, the point is that Personal Accident Insurance plans will provide a lump sum financial benefit should you experience a severe accident that leaves you seriously injured or disabled.

You are free to use the lump sum settlement for whatever you may wish, including paying your medical and rehabilitation expenses. You can also use the Personal Accident Insurance claim to fund your costs of living while you are recuperating by using that money to pay for your mortgage, children’s school fees, or rent. Some Personal Accident Insurance policies are designed specifically for Athletes (who may otherwise have trouble receiving any protection), while others are designed specifically to assist you with accidents you experience as a fare paying passenger on public transportation, or address the needs of elderly individuals and children.

In any case, the coverage offered under a Personal Accident insurance plan in Hong Kong can actually be extremely broad, even to the point of possibly offering “double indemnity’ if the injury was caused as:

• A fare paying passenger on any scheduled land, air, or sea route
• An occupant of an elevator
• Burning of any theatre, hotel, or other public building where the insured arrived prior to the outbreak of fire.

In these situations, dependent on your insurance company and the policy you’ve purchased, it may be possible for the insurance to pay up to 200% of the coverage value of the Personal Accident plan.

Drawbacks to Personal Accident Insurance

Although Personal Accident plans are relatively inexpensive from a premium perspective, this also limits a large number of Hong Kong Personal Accident Insurance options to fairly low levels of coverage.

In Hong Kong Personal Accident Insurance plans can start at HK$200,000 sum insured, but top out at around HK$3,000,000 – 5,000,000 for the more commonly available products. In the great scheme of things, this is not a tremendous amount of money, especially if you have gone completely deaf, or suffered partial paralysis (both conditions which would be limited in their settlement) where you would likely need to completely re-assess and overhaul your lifestyle.

This is why Personal Accident Insurance is normally taken out in conjunction with another form of insurance; usually health insurance, or as a rider on a life insurance product. Using Personal Accident Insurance in this manner allows for increased coverage, but will come in return for an inflated premium.

Personal Accident Insurance in Hong Kong

As a policyholder, you have many personal accident insurance options in Hong Kong, some better than others. However, the sheer variety of choice can make understanding which product is right for you difficult.

As a broker CCW Global is independent of any insurance company, and under Hong Kong law we represent your interests and not those of the insurers. Our expert brokers can help you compare your leading Personal Accident insurance options, and assist you in tailoring coverage which is perfect for your specific situation.

For a free quote, simply complete the short form at the top of this page. Alternatively, you can receive more information about Hong Kong Personal Accident Insurance or about CCW Global as a company, by Contacting Us.