What is Personal Accident and Sickness Insurance?
The fact that man most time has zero knowledge of what is going to happen to his life the next minute of the day, goes a long way to explaining what accident and sickness insurance is all about. This goes a long way to establishing the saying that life is like a dice that can throw one to any place or situation either good or bad provided you have breath.
However, personal accident and sickness insurance is an insurance contract that provides financial support or compensation to a policyholder who is a victim of injury, sometimes resulting in death, due to accident and sickness. The severity of the injuries is specified with the compensation payable being graded accordingly.
For instance, death or near-death situation that is almost total economic incapacitation like loss of sight or limbs may attract capital sum as compensation. The payment of an annuity is provided in the event of permanent disablement due to causes other than loss of eye or limbs.
The policy is usually extended to include a weekly benefit of up to 107 weeks or compensation if the insured is temporarily disabled from carrying out his normal duties. If you are a company with personal accident & sickness cover, your company will be paid a benefit if an employee is killed or unable to work, either permanently or temporarily, following injury or illness.
The company can then use the money in any way they wish. The most common use would be to pay sick pay for the employee or hire a temporary replacement. This kind of insurance is especially useful if your company has a generous employment contract as it will cover your sick pay costs.
Alternatively, such insurance could be considered a perk of employment, with employees knowing they will receive money if injured or ill.
What Does Personal Accident and Sickness Insurance Cover?
In simple terms, personal accident and sickness insurance covers accidents or illnesses that prevent you from working, stepping in to pay out a lump sum in the event you suffer a serious injury, or helping to replace monthly income if an accident or illness keeps you from working.
What’s more, personal accident and sickness insurance don’t just cover accidents or illnesses suffered while working – it can help with the bills you can’t earn, even if you’re injured while away from work.
What if you take a nasty tackle while playing for your Sunday League football team? A bad injury could keep you away from the coalface for weeks. Similarly, a back injury on the golf course could just as easily mean a long lay-off.
Sport is not the only hobby that brings a risk of course. All manner of seemingly innocuous mishaps can end in disaster. A DIY accident, even a slip of the bread knife could leave you with an arm in a sling and unable to work.
Then there are the things that just happen randomly. If you’re involved in a car accident or come down with a nasty, lingering bug – glandular fever or pneumonia for instance – you could be away from the tools, canceling jobs, and worrying about money in no time.
Whatever the cause, the added stress and worry that comes with lost income is unlikely to speed up your recovery and could even force you back to work before you’re truly ready.
Basic Things to Know About Personal Accident and Sickness Insurance
Everybody has their own unique circumstances and needs when it comes to Personal Accident and Illness insurance. To meet these needs there are different waiting periods i.e how long you have to be out of action before the cover kicks in, benefit periods, and benefit levels available.
Although personal accident insurance is taken usually by individual policyholders, the case of group schemes exists. Sometimes the employee of labor assumes the contract on behalf of their employees. In contrast to individually purchased policies, group personal accident policies have flexible benefits and compensations which depend on the employer’s and employees’ requirements. Benefits may thus be provided either on the normal fixed scale or in variation form according to individual circumstances.
A lump-sum payment can be varied – for instance, paying lower death benefits for young people without dependants but increasing compensation for permanent disablement. Basically, weekly or monthly entitlements if needed can be attributed to the earnings of different categories of employees or maybe on a fixed scale.
Premiums are usually fixed as a percentage of wages or salaries. The percentage rate applied differs among groups of employees or occupations, reflecting the differing risk of accident that each faces.
What is sickness Insurance?
Generally, it is not an only accident but also a sickness that can cause temporary total disablement. However, sickness insurance pays for a benefit in the event of death, injury, or illness of an insured person. A policy can be taken out in the name of an individual, in which case the individual receives the benefit, or in the name of a company, in which case the company receives the benefit.
The compensation could be extended also to 104 weeks, like in the case of a personal accident. A big setback for the policyholder in sickness insurance exists; Where a particular illness could lead to claims recurring, the benefits may be constrained at the renewal of the contract or terminated by refusal to resew the contract by the insurer.
Sickness insurance is health insurance. It is, however, not permanent health insurance.
Personal accident and sickness insurance cover are usually taken out in the following ways:
- Personal accident only.
- Personal accident and sickness.
The nature or level of your condition will determine the kind of cover that will be in place. We will elucidate which level is most appropriate when making the recommendations.
Cover typically includes:
- Accidental death.
- Loss of one or two limbs.
- Loss of one or two eyes.
- Permanent total disablement.
- Temporary total disablement (per week).
- Temporary partial disablement (per week) sickness benefits.
- Total and irrecoverable loss of sight in both eyes.
- Permanent total disablement by paralysis.
- Temporary total disablement (per week).
Generally, if you had an accident, or are left in a condition such that you are unable to work due to sickness or injury, in most cases how to pay for the cost of treatment becomes difficult.
In such conditions, the good news is it’s very easy to defend against these kinds of scenarios. Personal accident and sickness insurance is a simple cover designed to pay out a lump sum if an accident strikes, or protect your monthly income in the event you suffer an illness or injury that prevents you from working or carrying out your daily tax.