If you are injured and out of work, the cost of living won't wait.
Accidents are an unfortunate fact of life. According to statistics from the Australian Institute of Health and Welfare, nearly half a million people (461,307) were hospitalised in Australia as a result of an injury in 2013–14.
But while there’s no way of predicting accidents or preventing them from occurring altogether, there is one simple thing you can do to protect yourself against the financial impact of accidental injury: take out injury insurance. With the right type and level of cover in place, you’ll receive the support you need to make ends meet until you get back on your feet.
What is injury insurance?
Injury insurance is any type of insurance policy that pays a benefit when you suffer a range of common accidental injuries. However, the cover provided varies depending on the policy you choose, with some offering a one-off lump sum payment and others offering an ongoing monthly benefit while you are off work.
This form of cover can help you replace lost income while you’re unable to work, pay medical and rehabilitation costs, and generally continue to provide for yourself and your family while you recover.
There are three types of injury insurance available in Australia:
- Income protection insurance. Income protection insurance provides an ongoing benefit when you suffer an injury or illness and are unable to work for an extended period. The benefit usually replaces 75% of your regular income, allowing you to continue to provide for your family and removing most money worries so you can concentrate on your recovery.
- Total and permanent disability (TPD) insurance. If you suffer a serious illness or injury that leaves you totally and permanently disabled and unlikely to work ever again, TPD insurance provides a lump sum benefit. An entire 15% of all injury-related claims TAL paid out in 2017 was for TPD insurance, showing just how serious an injury can be. You can use your benefit however you like, such as to repay the mortgage, manage your medical expenses, make home modifications and help your family cope with the loss of your income.
- Standalone injury insurance. Also known as accidental injury insurance, this type of cover pays a lump sum benefit when you suffer an accidental injury. The more serious the injury you suffer, the greater the benefit you may be entitled to. You then have the freedom to use the benefit however you like, allowing you to pay the mortgage, pay other bills and replace lost income until you have recovered.
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The panel of insurers that finder.com.au works with is currently unable to provide standalone injury cover.
The table below outlines the features of each injury insurance policy option:
|1. Standalone injury insurance||2. Income protection insurance||3. TPD insurance|
|Benefit type||Pays a lump sum benefit||Pays an ongoing monthly benefit||Pays a lump sum benefit|
|What's covered||Covers accidental injuries only||Covers injury and illness (involuntary redundancy cover often available as an extra-cost option)||Covers total and permanent disability caused by injury or illness|
|When benefit is paid||When you suffer a listed accidental injury||When you suffer a serious injury or illness and are unable to work for longer than the policy’s waiting period||When you become totally and permanently disabled due to injury or illness (must satisfy the insurer’s definition of TPD)|
|How benefit can be used||However you would like||However you would like||However you would like|
What types of injury are covered by a standalone injury insurance policy?
The injuries covered by a standalone injury insurance policy vary between insurers, but most policies will usually cover:
- Severe burns
- Loss of limbs
- Loss of sight
The benefit amount payable usually varies depending on the severity of the injury. For example, the benefit for a fractured hip will generally be much higher than the benefit for a fractured collar bone, while the loss of limbs or sight will result in an even larger payment. Many policies also pay an accidental death benefit if you pass away as a result of your injury.
|Injury type||Standard payout||Payout on a premium policy|
|Fracture||$5,000–$8,000 (depending on where)||$10,000–$15,000 (depending on where)|
|Loss of sight or a limb||$40,000||$100,000|
For a full list of the injuries covered and to what extent, read the PDS of any standalone injury insurance policy you are considering purchasing.
What are some exclusions?
Some exclusions you may find on personal injury policies include:
- Self-inflicted injuries or ones that occur from attempted suicide
- Dental injuries
- Illnesses if on a standalone personal injury policy
The most common type of workplace injury is trauma to the body, e.g. from lifting something too heavy.
|Type||Injury or disease?||Male||Female||Total|
|Traumatic joint, ligament, muscle or tendon injuries||Injury||29,915||18,010||47,925|
|Wounds, lacerations, amputations and internal organ damage||Injury||11,755||4,140||15,895|
|Injury to nerves and spinal cord||Injury||125||60||185|
Source: Safework Australia
Another facet of life where injuries are commonly found is when playing sports. The sport with the highest rate of injury in Australia is Australian Rules Football.
Source: Australian Institute of Health and Welfare 2014