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Personal accident insurance Brokerage Insurance

11 May 2024

Personal accident insurance is one of the significant elements of financial planning that is usually ignored. Numerous people think that their current insurance policies cover accidents, but in fact these policies may not be good enough to cover the accident. Hence, it is time to ask, what is personal accident insurance?

PA insurance, or personal accident insurance is a kind of insurance policy which gives financial compensation in the case of an accident that leads to bodily injury, disability, or death. On the other hand, unlike health insurance, personal accident insurance concentrates on accidents and the consequences that follow them, while health insurance deals with the expenses incurred due to illness or injury.


Personal accident insurance conditions

 The policy has to give an exact meaning of "accident" which will be the content of the policy. On the surface, this might seem like a simple matter, but insurers usually set certain conditions that have to be fulfilled for an incident to be considered an accident. This definition of eligibility is the most important thing to know before you can ask for what your rights are.

Besides, the majority of the personal accident insurance policies are equipped with exclusions. These are the situations or circumstances where the policy will not cover the area. The usual exclusions comprise of the injuries that were caused by the person himself, the injuries which were sustained while intoxicated or drugged and the injuries resulting from the harmful activities. It is very important to go through these exclusions of the policy in detail to prevent any nasty incidents when making a claim.


What are the different forms of personal accident insurance policies?

The personal accident insurance policies are of different kinds that meet the various requirements and budgets. Some common types include:


1.       Individual Accident Insurance: This type of policy operates to the benefit of a person and usually, in case of the accidental death or disablement, the individual receives a lump sum payment.

2.       Family Accident Insurance: Being tailor-made for a whole family, this policy gives the policyholder, their spouse and the dependents of the children the coverage.

3.       Group Accident Insurance: Group accident insurance is a benefit that is provided by employers or organizations to their employees or members.  It covers the specific group of people who are insured.

4.       Travel Accident Insurance: The policy which is geared towards travelers covers the accidents which happen on the way to a destination, whether it is in the neighbor country or in another country.

5.       Rider or Add-On Coverage: Many insurance companies have personal accident insurance as a rider or add-on to other insurance policies, such as life insurance or health insurance, that is a plus to the other policies and gives more protection to the client in case of accidents.

Exploring the Advantages of Personal Accident Insurance

 ·         Financial Protection: Apart from the obvious, the main benefit of personal accident insurance is the financial security it provides. If, for example, in an accident, the victim becomes disabled, either temporarily or permanently, this insurance provides compensation. Thus, this financial aid can take care of the medical bills, rehabilitation costs, and even the loss of income due to disability, freeing the policyholder and his or her family from the financial burdens and enabling them to concentrate on recovery.


·         Coverage for Various Scenarios: Personal accident insurance doesn't just cover accidents resulting in physical injuries; it is a broad shield that covers a great number of circumstances. Whatever the cause is, whether it is an accident on the road, an accident at home, injuries sustained during sports activities, or even accidents occurring during travel, this insurance usually covers, hence, it is a form of peace of mind in different aspects of life.


·         Supplementary Coverage: Apart from medical bills and income loss, personal accident insurance is usually accompanied by supplementary benefits. The contents may range from coverage for ambulance services, hospitalization expenses, and also reimbursement for certain medical treatments that are not covered by the standard health insurance policies.


·         No-Fault Compensation: In contrast to the other types of insurance, personal accident insurance is a no-fault policy. Thus, the policyholder can get compensation even if it is determined that he or she was at fault in the accident, as per the policy terms.


·         Affordability and Flexibility: Personal accident insurance is usually cheaper than other types of insurance, therefore it is affordable for many people.


·         Global Coverage: For those who often travel or work in different countries, personal accident insurance can be the solution for them as it can provide coverage globally so that they are protected in case of accidents no matter where they are.


·         Ease of Procurement: Personal accident insurance can easily be obtained after following some basic steps. The majority of insurance companies provide online systems where individuals can compare products, calculate premiums, and buy policies with a little hustle.


 How much is life insurance?


Firstly: let’s talk about the factors that could affect the insurance cost

·         Age: Generally, younger people get lower life insurance premiums than older people. This is due to the fact that younger policyholders are seen as the ones with lower risks of health problems and death.


·         Health Condition: Life insurance costs are really dependent on the health state that you are in at a particular time. Insurers may demand a medical examination or a look at your medical record to find out the degree of the risk you constitute. Usually, healthy people who do not have any pre-existing health conditions are charged lower rates.


·         Coverage Amount: The sum assured or coverage amount you select determines the premium amount you will pay. With the increased amount of coverage, comes the higher premiums. The main thing is to have a balance between the necessary coverage and the expenses involved.


·         Type of Policy: There are many life insurance policies, such as term life, whole life, and universal life. Term life insurance is usually cheaper than whole life and universal life policies because it is short-term and offers specific coverage, whereas the latter two insurances offer lifelong coverage and usually have higher premiums.


·         Smoking Status: The fact that smoking is a major risk factor for insurers results in higher premiums for people who smoke than for those who do not. If you are a smoker, quitting may be the reason behind paying reduced premiums over a period of time.


Cost Estimates:


While it's challenging to provide exact figures without specific individual details, here's a rough estimate to give you an idea:

Term Life Insurance: For a healthy 30-year-old non-smoker looking for a 20-year term life policy with a total coverage of EGP 500,000, the monthly premium might be between EGP 150 and EGP 300.

Whole Life Insurance: This person may be willing to pay higher insurance premiums for a whole life policy, maybe from EGP 400 to EGP 700 per month, for the same coverage.