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Sickness and accident insurance

Accident and sickness insurance won't offer the same protection as most income or life insurance plans, but the weekly payouts can help those forced out of work to get back on their feet.

What you need to know

  • Accident and sickness insurance is a short term cover that pays a weekly benefit to tide you over while you cannot work, and is available for the self-employed.
  • It can help you meet debts such as your mortgage or car loan, as well as ongoing living expenses.
  • Accident and sickness cover is a more limited than other life insurance options.

What is accident and sickness insurance?

Accident and sickness insurance, sometimes called personal sickness and accident (PSA) insurance, is a short-term cover that can be taken out to protect against financial losses if you can no longer work for a period of time.

It pays a percentage of your salary each month – usually for up to 12 or 24 months – after certain injuries or illnesses that cause disablement; it can cover accidental death too. The benefit from accident and sickness insurance can cover:

  • The mortgage or loan repayments (car loan, credit card, etc.)
  • Everyday living expenses (food, school fees, utility bills, clothes, and so on)
  • Anything else – there's no requirement on how you spend a payout.

How does accident and sickness insurance work?

An accident and sickness policy will typically offer a weekly benefit, or a lump sum, in the event of a successful claim.

A weekly benefit is usually offered for a serious injury or illness that leaves a claimant unable to work temporarily. Whereas a lump sum payout may be offered following an accident that leads to a permanent disablement or death. Let's dig into the policy features in more detail.

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Policy features

In addition to an ongoing monthly benefit, which is often a percentage of the policyholder's income, some benefits that can be found in policies include:
  • Death benefit: A policyholder's beneficiary could get a multiple of their loved one's monthly benefit if the policyholder passes away.
  • Nursing care benefit: Benefit paid to cover the costs of hiring an approved professional nurse to care for policyholder if they are confined to bed.
  • Rehabilitation expenses benefit: Benefit paid to cover various expenses that may arise while the insured recovers. This can include adjustments to their home (i.e. ramps, hand-railings).
  • Accommodation benefit: Benefit provided to help cover the costs of accommodating an immediate family member who has had to travel if a policyholder is confined to bed due to their injury.

Many of these benefits, if they are available, will need to be added on to a policy for an added fee.

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Age requirements

The maximum age at which you can take out sickness and accident insurance cover varies between insurance providers. However, as a general rule, Australian residents aged from 18 to 65 years of age may be able to apply for cover.

Most sickness and accident insurance policies will also stop providing cover once you reach a certain age, usually 90 years.

You can find the full list of eligibility requirements in a policy's Product Disclosure Statement (PDS).

Speak to an expert about your accident and sickness insurance needs

Accident and sickness insurance policies in Australia

ProviderPercentage of Benefits PayableFuneral BenefitCooling Off PeriodPolicy Expiry Age
QBE100% for death, total permanent disability, limb paralysis, unsound mind, loss of sight and hearingYes - Up to $7,50021 days65
HCF100% for accidental deathNo30 days85
Jim's Insurance100% for death, total permanent disability, limb paralysis, loss of limbs and sightNo21 days70
AHI100% for death, total permanent disability, limb paralysis, insanity, loss of limbs, sight and hearingYes - No specified amount21 days70
Family Day Care Australia100% for death, total permanent disability, limb paralysis, insanity, loss of limbs, sight and hearingYes - No specified amount21 days70
Chubb100% for death, total permanent disability, limb paralysis, insanity, loss of limbs, sight and hearing in both earsYes - Up to $5,00021 days65

*The quotes provided are for 35 year old man, non-smoker who lives in NSW looking for a $500,000 Trauma Cover. Quotes are only to be used as a general guide and are subject to change. For most accurate pricing receive a quote on the Finder quote engine.

Accident and sickness insurance: Pros and cons


  • There are a few different ways you could be paid out: death, temporary disabilities and total and permanent disablement.
  • It's an affordable insurance option for many
  • It often pay out weekly, giving you flexibility
  • Accident and sickness insurance can offer support those who've been turned down for other insurances in the past.


  • Policies can be cancelled at any time by an insurer – and there's no guarantee of renewal. Plus, there are far fewer policy features compared with standalone income protection
  • You can only claim for short periods of time, typically up to 1 or 2 years. Whereas life cover products can pay out until you reach 65
  • Benefit payments are often linked to loss of income. If your income changes – and you haven't increased your sum insured – any payouts may fall short of the funds you were planning for.
  • A number of policy exclusions can apply, such as mental illness and sickness from pregnancy.

What's the benefit of sickness and accident insurance if I'm self employed?

Sickness and Accident Insurance provides an obvious benefit to self employed workers that are not covered under group policies from their employer. If you were suddenly unable to keep your business running through your own sickness or injury, a sickness and accident insurance could be your only financial survival opportunity.

Income protection for the self employed

A sickness and accident insurance policy can provide up to 100% of your income, to ensure you are able to continue paying your bills while incapacitated as well as keep food on the table.

While it can be more difficult for self-employed workers to find a provider that is willing to offer cover insurance cover, if the worker has previously been employed in their field as an employee, they can often apply for an indemnity style policy.

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