Should You Have Personal Accident Cover?
Life can be cruel sometimes, and as much as we’d like to pretend otherwise, accidents do happen. Personal accident cover can protect you financially if you find yourself unable to work due to the injuries sustained in an accident. Here’s what you need to know about personal accident cover.
What Is Personal Accident Cover?
This type of cover is often mixed up with accidental death cover (which pays a lump sum to your beneficiaries if an accident causes your death) but the two are actually quite different. Personal accident cover protects you if injuries sustained in an accident stop you from working, provided that the injuries are external and visible and have occurred as the direct result of an accident.
Most policies will pay up to 75% of your income, as long as you’re off work for longer than the minimum number of days specified in the policy. For most policies, you can choose for benefits to be paid for either two or five years, or right up until retirement, depending on the severity of the injury and how badly it affects your ability to work on a long-term basis.
Why You Need It
Accidents happen every day, and no matter how careful you are, you can’t guarantee that they won’t happen to you. Taking out personal accident cover can offer you valuable peace of mind if an unexpected injury means that you can’t go about your normal work.
Personal accident cover could prove to be particularly crucial if you’re self-employed and aren’t entitled to paid sick leave as it would most likely be your only option other than dipping into savings to keep you afloat.
Piece of mind isn’t the only benefit attached to personal accident insurance. Regardless of whether you need to access the benefits, personal accident insurance premiums are tax deductible, so there are some great tax-related benefits involved too.
What Isn’t Covered?
There will often be exclusions in terms of what is and isn’t covered by the policy. For example, injuries that are self-inflicted won’t usually be covered and some policies may exclude dental injuries. Sickness isn’t covered by a personal accident policy, so you’ll need to look at other types of cover if you want to be protected from inability to work due to sickness rather than an accident.
Personal accident insurance is often confused with accidental death insurance but the two types of insurance are actually quite different. While a personal accident policy pays benefits to protect against loss of income after an accident, an accidental death policy is similar to a life insurance policy, and pays a lump sum to dependents if you’re involved in a fatal accident.
If you’re worried about how you would survive financially if an accident left you unable to work for even a relatively short period of time, personal accident insurance is definitely something that you should strongly consider. This is particularly true if you’re self-employed and wouldn’t receive sickness benefits to tide you over until your return to work.
Even if you never need to claim, the reassurance that you won’t be forced into debt if accident-related injuries stop you from working can be invaluable, and there are tax benefits too. Look into all your options and compare policies carefully to get the best cover for you, at the best price.
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