Personal Accident insurance or PA insurance is an annual policy which provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events.
The first thing you notice that this policy is an annual policy which means that it expires after a period of 12 months coverage for the insured. The Insured person can renew the policy for another year by paying the renewal annual premium as stated in the policy contract.
It is offering you 24 hour a day and 365 days a year coverage worldwide protection against accidental death and disability or dismemberment, medical reimbursement and many other benefits.
Key features and benefits of Personal Accident Insurance are:
- Benefit 1: Accidental Death – lump sum payment of sum insured to the deceased’ beneficiaries
- Benefit 2: Permanent Total Disablement or Permanent Partial Disablement – Lump sum payment of 100% of sum insured to the insured for Permanent Total Disablement (PTD). If Permanent Partial Diablement, lump sum payment of benefits by the percentage stated in the policy schedule.
- Benefit 3: Temporary Total Disablement or Temporary Partial Disablement- Lump sum payment of the Temporary Total Disablement benefit to insured for the duration he/she is unable to perform the duty he/she is able to do in the normal course of work. Temporary Partial Disablement is the situation when the insured is unable to perform some of the duties he/she used to do but is able to do some other task which will not affect his recovery. The lump sum payment will be calculated for the duration he/she is unable to do his normal duty but can perform other light duty with ease and therefore, the compensation of benefit will be a certain percentage of the benefit specified in the policy schedule.
- Benefit 4: Medical Reimbursement is the cost of medical treatment for accidental injury sustained being indemnified by the insurance company up to the limit of medical fees stated in plan of Personal Accident Insurance purchased by the insured person.
- Benefit 5: Hospital income(HI) is the cash allowance per day indemnified by the insurance company to the insured person for each day the insured is warded at the hospital undergoing treatment for the accidental injury. This benefit will be much sought after by self-employed persons as they will not be able to earn an income during hospitalisation while they still need to provide for their family’s daily expenses. Usually this indemnity for loss of income is limited to a certain number of days like 60 days or 180 days consecutive hospitalisation for each incident and/or the minimum hours warded in hospital has to be 6 hoursto 12 hours or even 24 hours continuously to be considered as one day. It may vary from plan to plan and insurers.
- Benefit 6: Weekly Indemnity(WI) is the weekly cash benefit an accidentally injured insured person is entitled to claim for loss of income while on sick leave as certified by medically qualified practitioners or doctors recognised by the Malaysian Government and Ministry of Health. Most insure company will have plans that pay up to a maximum of 52 weeks. Most insurance companies will also pay a certain percentage of the full weekly indemnity allowance if the insured’s injury does not totally incapacitate him/her to perform other light duties while recovering over the period of sick leave as certified by the doctor.
- Benefit 7:Inconvenience allowance is the benefit where the insured person enjoys an additional cash allowance for the long period usually more than 15 days to be discharged from the hospital for treatment and recuperation at hospital or at home resting for full recovery from accidental injury. The family of the insured is inconvenienced as they need to constantly visit him/her at the hospital.
- Benefit 8: Wheelchair and Crutches allowances for injured insured person to have assisted mobility to reduce the financial burden and to help faster recovery by not aggravating the accidentally injured limbs especially.
- Benefit 9: Dengue Fever benefit is cash allowance paid to insured’s family if they are bitten by the Aedes Mosquitoes and having Dengue Fever which can caused the insured patient to have prolonged period of high fevers that leads to death if left untreated. This benefit was introduced by insurance companies to help lighten the insured’s financial loss in the light of common outbreaks of Dengue Fever in Malaysia.
- Benefit 10: Ambulance Allowance – cost of ambulance services rendered to the insured due to accidental injury.
- Benefit 11: Infertility Benefit is the benefit to the insured who is injured in an accident and because of that accident he/she has become infertile due to injury to their reproductive organs.
- Benefit 12:Snatch Theft indemnity allowance is for the Loss of personal documents and cash to snatch thieves.
- Benefit 13: Traditional Chinese Medicines and treatments fees is reimbursed up to a fixed amount such as RM500 per accidental injury incident.
- Benefit 14: Medical Report allowance is the benefit paid to the insured for the buying of medical reports from the hospital or medical clinic to support the claim
Tips on buying PA or Personal Accident Insurance
Tips 1 : Personal Accident Insurance policy is the cheapest insurance among all types of insurances you can buy. Do not procrastinate. Do not delay if you need one. If you do not have one, buy one Personal Accident Insurance now!
Tips 2: Buy personal accident insurance policy when insurance companies are having promotional sales campaign. Usually you will be offered an value for money and attractive coverage plans during promotional sales offer period. Grab one and you will not regret you did make the right decision.
Tips 3: Discuss with your personal financial adviser or insurance agent when shopping for Personal Accident Insurance or any other insurance products. He will help you to review and proposed the best policy to meet your needs and also to get a complementary policy that complement your existing financial planning program so that you will enjoy a comprehensive coverage all year round.
Tips 4: Nominate your beneficiaries so that the insurance company can speed up the claim process and pay the claim to your beneficiaries when the insured is gone. Leave a legacy but to not leave messy things for the people you loved.
Examples of Personal Accident Insurance Claims and Frequently Asked Questioned
Example no. 1: The insured slipped and fell from staircase at home while going upstairs. Injured his head with knocks against the cement floor and sprained his arms and dislocated a finger. Can claim for medical reimbursement for the cost of medical treatment incurred at clinic or outpatient treatment at hospital including X-ray cost.
Example no. 2: A student cycling to school was ran over by a lorry which resulted in the student having his left leg amputated from left hip down and permanently disabled on his right hand from the shoulder down. The student PA has a face amount of RM50,000 for accidental death or total permanent disability. Usually insurance company will pay 50% of the sum insured for loss of use of one limb. In this instance, for loss of any two limbs, it will be 100% of the benefits, i.e. RM50,000 for the parents of the child. A child under the age of eighteen(18) years will require an appointment of trustee. In this case, the parents are the joint trustees or beneficiaries.
In the above case, the student total cost of medical treatment was Ringgit Malaysia Thirty Thousand(RM30,000). The Student PA has a Medical Reimbursement limit of RM3,000 per accident The insurance paid the maximum limit of RM3,000. The parents of the child can sue the lorry diver and owner and claim from the motor insurance policy of the lorry owner under Third Party Bodily injury for the financial loss the incurred because of their child suffering from the road accident and loss of future potential earning or loss of income. If the student is also found to be negligence, the court may reward the student for the bodily injury medical cost but will discount it for the contributing factor to the accident.
Example no. 3: Mr M went on holidays with his family in Pulau Langkawi. He and his wife and three children were playing and swimming by the sea off Pantai Cenang Beach when there was an Earthquake under the Indian Ocean near Aceh in Sumatra, Indonesia. The tidal waves created has formed Tsunami and it hit Pulau Langkawi. Mr M and his wife and three kids were drowned and killed by the Tsunami as they bodies were found a few days later at sea.
The Personal Accident policy bought by Mr M is a family plan that insures the adults like him and his wife is RM100,000 each for accidental death while the benefit for each child is RM50,000 or 50% of the adult sum insured of RM100,000. As all of Mr M’s family members perished, the insurance company will pay to his next of kin RM100,000 for Mr M’s life and another RM100,000 for Mrs M’s life. and RM50,000 x 3 = RM150,000 for the loss of his 3 children’s lives. Total benefit paid to next of kin is RM100,000 + RM100,000 + RM150,000 = RM350,000. For Muslim family, the benefits will be distributed to the next-of-kin of the deceases according the Shariah laws.
Example no. 4: A coffee shop owner, Mr Ah Huat injured himself on his right hand when a boiling water accidentally spilled onto his left hands and he suffered pains and burnt on his hands. He sought outpatient treatment at his friend, Dr Anwar ‘s local clinic in Sunway, Seberang Jaya, Penang. The medical bills cost Mr Ah Huat RM388.80. His personal accident insurance policy has a Medical Reimbursement limit of RM1,000 for each claim incident. He paid cash to Dr Anwar and submitted his claim form and medical report and bill to his insurance agent for transmission to the insurance company. The insurance company paid Mr Ah Huat the full cost of his medical bills RM388.80.
Example no. 5: Many visitors went for holidays in Batu Ferringhi in Penang Malaysia during school holidays. Mr Kerpal and his buddy Eng Guan went to hire the water jet ski and took it for a ride. At the same time, an Arab couple on honeymoon and were staying at Sayang-Sayang hotel also went to ride the jet ski. This couple were so engrossed with each other on the honeymoon ride that they failed to notice that Kerpal and Eng Guan were coming towards them and they collided and all four fell into the sea. Kerpal was dead due to the impact which caused broken ribs and breathing difficulties while Eng Guan was blinded on his right eye as some debris hit him. Kerpal had a personal accident policy with accidental death benefit of RM1.0million which he purchased form Siang Kit. His family received the payment of RM1.0million from the insurance company. Eng Guan received RM100,000 or 50% of the sum insured on his personal accident policy which covers accidental death and disability of RM200,000. his policy pays 50% for the loss of one eyesight.
Eng Guan was warded 30 days at the hospital undergoing treatment for the eye and other bodily injuries which cost him RM10,000. His medical reimbursement limit was RM10,000. He was paid the maximum RM10,000 for medical expenses and the daily hospital income of RM100 per day multiply by 30 days = RM3,000.
Example no. 6: Mr Jefri and Miss Siti got married at Yan Kecil, Kedah last weekend, He invited his friend Mr Awang and wife Miss Salmiah to the feast(kenduri). As the cook was not able to order enough of chickens, the cook bought some frozen chickens from a local sundry shop which was not fresh. Mr Awang and Salmiah had vomitted and had diarrhoea. They were rush to the private hospital Metro Speialists Hospital in Sungai Petani, Kedah. Both husband and wife were admitted to hospital and stayed there for 3day and 2 nights and the bill incurred was RM3,000 for the full course of treatment for food poisoning. Mr Awang and his wife claimed the medical reimbursement of RM3,000 and their policy is covering the medical reimbursement up to the limit of RM4,000 each.
Example no. 7: Ah Kow was bitten by a Rotweiller which ran loose. He needed three(3) stitches on his left foot and on medical leave for ten(10) days. He was able to claim for the medical reimnursement and the weekly indemnity benefits.
Example no. 8: Linda and Niko were playing squash at Penang Sport Arena, Penang, malaysia when Niko was accidentally smashed and hit by Linda while playing squash. Niko buttock was swollen and needed outpatient clinic treatment. Niko can claim the cost of medical expenses of RM150 from her Personal Accident Insurance policy as well as the pro-rated three days weekly indemnity benefits.
Example no. 9: Mr Ah Long was insured for personal accident insurance for accidental death benefit of RM400,000. He went to the bank to bank-in his shop’s daily collection. Suddenly there was a bank robbery happening at the bank. The robber on his way out to escape fired a shot hitting Mr Ah Long and he died instantly at the bank from the bullet that got through his head. His widow calimed the RM400,000 from the insurance company for the accidental death benefits.
Example no. 10: Cik Minah was walking home after finishing her works in the office when suddenly a thieve snatch her gold necklace and her handbag with purse ccontaining her identity car and driving license and some cash of RM100. She suffered bruises to her neck and hands and sought medical treatment at clinic which cost her RM80. She also had to seek traditional massage from Sinseh at RM50. She loss her gold necklace which is worth RM1,000 to the snatch thieve. She was able to claim for insurance indemnity of RM230 but not the price of her gold necklace as her snatch theft policy covers cash and personal documents loss up to RM500 limit.
Example no. 11: The incident of a Boeing jet plane of a commercial airline MAS Flight MH17 with 239 passengers and crews which was flying from Schipol airport, Amsterdam, Netherlands to KLIA airport, Kuala Lumpur, Malaysia was shot down while it was over Ukraine air space. There was a civil war near Donetsk area, Ukraine. All on board the plane perished. In an unprecedented case, the insurance companies insuring the passengers and crews have decided to pay full compensation, based on the flight manifest of people on board, of the insurance policies benefits to the next-of-kin of the deceases while the bodies of the victims of flight MH 17 were still being retrieved and post-mortem were carried out at the Netherlands military camp hospital facilities and the bodies were undergoing identification process.
Our heartfelt condolences to the family of the victims of MAS flight MH17 for the loss of their loved ones.
Hope the above examples have given you some answers to your questions about personal accident insurance.
If have any questions or issues related to personal accident insurance policy, please feel free to channel to us, your choice general insurance agent in Kota Permai, Bukit Mertajam, Penang, Malaysia. We shall be glad to assist you to do a free review of your existing personal accident insurance policy purchased. and to help you find solutions to your personal accident insurance needs. Please contact us now.