Personal Accident Insurance

Personal Accident Insurance

Keep up with ongoing expenses in the event of an accidental injury.

When a serious accident occurs it's never expected and it can happen anywhere. You could be at home, out and about, or even on a holiday.

This is where personal accident insurance can help. It's a form of cover that protects you financially in the event of an accidental injury, so you can keep up with expenses and immediate debts.

Compare accident and illness income insurance

Name Product Short Description Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period
Help protect your lifestyle with a new Virgin Income Protection policy. If eligible, you can earn 25,000 Velocity Points. Ends 02 September 2019. Min $80/month, min. 6 month policy to earn Points.


$10,000
85%
5 years
14, 28, 60, or 90 days
Get cover up to 75% (to a maximum of $10,000) of your monthly income.
$10,000
75%
24 months
30 days
Join Qantas Income Protection and earn up to 100,000 Qantas points. T&CS apply including minimum premium and policy hold periods apply to earn points.
$12,000
75%
5 years
2, 4, 13 weeks or 2 years
Receive one month's premiums free if you pay annually. T’s and C’s apply.

$10,000
85%
24 months
14 or 28 days
Receive up to 75% of your income (up to $10,000 per month) if you're unable to work due to serious illness or injury.
$10,000
75%
5 years
30 or 90 days

Compare up to 4 providers

Why do Australians take out personal accident insurance?

Personal accident insurance can provide you cover in the event of injuries sustained from accidents. Some of the key benefits of taking out cover include:

  • Replacing lost income and focusing on recovery. The benefit you receive can be used to cover the costs of living, rehab and what's not covered by your health insurance.
  • A more affordable policy than full income protection. Accident-only income protection insurance covers only injuries and not sickness, but this means premiums may cost less.
  • A benefit that can pay out in a few ways. You can either get ongoing income replacement or a lump sum payment.

accident-wide

How does personal accident insurance work?

There are a few types of personal accident insurance. How and when you are paid varies between these types of cover:

What's covered?

You're covered if you get into an accident that leaves you:

  • Disabled
  • Unable to work
  • With a defined injury (on some policies)

How am I paid out?

You may receive a lump sum payment or monthly income protection depending on whether your policy is:

  1. Standalone personal accident cover
  2. Total and permanent disability (TPD) cover
  3. Accident-only income protection
  4. Income protection

How does each type of personal accident cover compare?

Type of cover What's covered? Medical screening Payout type Can I get a quote on finder?
1. Standalone personal accident Specific injuries due to accidents e.g. fractures, burns and dislocations
  • Most policies won't require one.
Lump sum n/a
2. TPD cover Injuries and illnesses that leave you permanently disabled
  • Most policies will require one.
Lump sum Yes
3. Accident-only income protection Injuries that put you out of work temporarily
  • Most policies won't require one.
Monthly income replacement Yes
4. Income protection Injuries and illnesses that put you out of work temporarily
  • Most policies will require one.
Monthly income replacement Yes

Workplace accidental injury and disease claims in Australia

Injury/disease Percentage
Strains and sprains 42.40%
Musculoskeletal disorders 13.70%
Fractures 8.80%
Open wound 7.50%
Mental disorders 5.80%
Contusion with intact skin surface 5.60%
Deafness 4.10%
Hernia 2.30%
Dislocation 1.60%
Burns 1.50%
Other injury 4.40%
Other disease 2.40%

Source: Key Work Health and Safety Statistics, Australia 2014Learn more about workplace injuries and statistics in Australia

What type of accidents can I get cover for?

A sample policy could cover these types of injuries.

Accident type

What does this include?

Death & Total Disablement Quadriplegia
Accidental loss of life
Paraplegia
Disablement Permanent total or partial loss of eye sight
Permanent total or partial loss of hearing
Permanent total loss of use of one or two limbs
Permanent total loss of speech
Leg and arms
Fracture injuries Thumbs, Fingers, Toes
Skull
Jaw
Collarbone or Sternum
Kneecap and elbow
Wrist, Ankle, Hand, Foot
Ribs
Nose
Cervical e.g. neck

The table above is for illustrative purposes only and is not indicative of all policies available on the market.

Is personal accident insurance right for me?

Consider taking out personal accident insurance if:

  • You don't have the savings or the means to pay your living expenses / immediate debts without your income
  • You are self employed or employed on a casual or contract basis
  • You want to protect your finances

Reconsider your need for cover if:

  • You can already handle your expenses or debts with your savings
  • You have someone who can help you handle your expenses or debts
  • You are after cover for your partner and kids if you die - consider 'Life Insurance' instead.

What are the benefits of taking out personal accident cover?

Here are some of the perks you can get from taking out a personal accident policy:

  • Tax deductible premiums. The premiums you pay on income protection accident cover can be claimed as a deduction leading to a bigger return at tax time.
  • Flexible benefit payments. Depending on the type of cover you choose, you can choose to receive a successful claim as a lump sum payout to help with upfront medical expenses, or get your benefit monthly to assist to help with living expenses.
  • Total and permanent disability benefit. Most policies will include a benefit payout for total and permanent disability, where you are not able to return to work at all because of an accident. For example, if you were to lose a vital sense like sight or the use of a hand or foot, you would be eligible for this benefit. This extends to accidents resulting in paraplegia or quadriplegia.
  • Hospital reimbursement. Your policy can include cash benefits for each night spent in hospital.
  • Extra payouts. Some policies offer double or triple benefits if your accident is sustained while you're travelling, or for disappearance or exposure.
  • Associated accident costs. Accidents can entail a bunch of extra costs, so personal accident policies may provide a payout to assist with fees for counselling, rehabilitation, damage to clothing or personal property, and even the cost of specialist transport required to get you to hospital.

What additional features can my personal accident cover include?

Depending on the insurer, you may have access to additional features, such as:

  • Automatic renewal. Once your policy is approved, your insurer guarantees the renewal of your policy at the end of each contract period, or up to some stated maximum – often two years. This can save you needing to constantly renew it yourself.
  • Business expenses cover. This feature can mean your insurer will pay your weekly business expenses as they occur, or a set amount of business expenses stipulated in your policy agreement.
  • Work and leisure cover. Some policies will only cover you for accidents which occur at work. This lets you stay covered no matter where you are.
  • Transport insurance. This option extends cover to vehicle accidents, including injuries sustained behind the wheel, in the passenger seat, on public transport or even when you're struck by a vehicle while walking.
  • Volunteer work. With this, you can get insured for accidents which occur during your volunteer hours.

When am I not covered?

Personal accident insurance does not generally cover:

  • Injuries which have been self inflicted as the result of a suicide attempt
  • Dental injuries
  • Illnesses (on standalone personal accident insurance cover)

How do I make sure I'm covered when I make a claim?

To make sure you don't get a surprise denial when you need it most, we've detailed the most common reasons for rejection and what you can do to avoid them:

  1. A specific injury or illness isn't covered. Most policies have a defined list of inclusions and exceptions. Know what is and isn't covered when signing up.
  2. Non-disclosure. You need to be upfront about pre-existing medical conditions and injuries as well as what your occupations are when applying, or an insurer may reject your claim down the line.
  3. Workplace compensation. If you're entitled to separate workers compensation from an incident, some policies won't pay out. Make sure you understand whether your workplace provides separate cover beforehand.

Who might consider personal accident insurance?

Personal accident insurance can benefit a wider range of Australians than you might expect. Some examples include:

Volunteers

Benefits are not restricted to paid work, and volunteer workers can get access to personal accident insurance in case they are unable to perform their duties. In this instance, the organisation they volunteer for is covered if they lose one of their volunteers for a period of time.

Self-employed workers

In addition, family day carers and other self-employed workers who don't usually have access to sick leave or other workplace injury compensation can receive benefits they would otherwise lack, such as:

  • Compensation of up to 75% of average gross weekly income.
  • Benefits paid for up to 52 weeks (following a 30-day excess period).
  • Accidents which occur at any time of the day or night, anywhere in the world.
  • Cover without a medical check (although pre-existing conditions are often excluded).
  • Flexible premium payments, where you can make payments monthly or yearly.
  • A HIV accidental infection benefit.
  • Cover for complications from pregnancy or birth for up to 10 weeks.
  • Bereavement leave for two weeks if there is a death in your immediate family.

Trades

Working a trade? Personal accident insurance for those in trade industries can provide financial protection should you fall ill, be injured or even pass away (for some policies). Depending on how risky your trade is, you may find it difficult to apply for income protection cover, so secure your income with accident insurance, instead.

Athletes, professional and extreme sports players

Losing a star player during championship season can spell the end. As a result, many professional athletes are insured against injury by their team or sports club. If you're not quite at that level just yet but you still rely on your body to earn your keep, consider personal accident insurance for sports players. There's a range of policies no matter your chosen field – a professional dancer, for example, might get cover for broken bones and soft tissue injury for up to 52 weeks.

Is there an age limit for personal accident insurance?

This depends on the type of personal accident insurance that you have:

Type of cover Age of entry Age limit
1. Standalone personal accident 18 70
2. TPD cover 16 64
3. Income protection 18 64

Note: Exact age limits will vary between each insurer.


What's the difference between personal accident insurance and income protection different?

  • Personal accident insurance. Will usually only pay a lump sum of cash after an accident where you have suffered an injury.
  • Income protection insurance. Will pay an on-going benefit while you are off from work after an accident. Income protection insurance generally also includes benefits for sickness. Therefore, personal accident insurance is generally classified as a policy which pays a cash sum, and income protection insurance generally pays monthly benefits.

Do I need life insurance and personal accident cover?

While some personal accident insurance policies may provide cover in the event of death, it's important to consider that there are some notable differences from life insurance. These include:

Personal Accident Insurance Life Insurance
Type of cover Provides a lump sum, monthly or weekly benefit in the event that you are ill or injured in an accident and unable to work. Provides a lump sum payment in the event of your death or if you have been diagnosed with a terminal illness with less than 12 months to live.
Cover amount Limited benefit amount and depends on your average income at the time of application. Unlimited cover
Continuation of cover May be cancelled Renewable until you turn 99 years old, provided that premiums are paid when due.

Which is right for me?

There is no one "right" policy, however as a general rule of thumb:

  • Life insurance is for adequate protection to cover your family financially in the event of your death
  • Accident insurance is to cover you in the event of an injury

What determines how much I pay for cover?

There are several factors that can affect the cost of your personal accident insurance premiums, including:

  • The waiting period. The shorter the waiting period you select, the more you will typically have to pay for cover.
  • The benefit period. Longer benefit periods attract higher personal accident insurance premiums.
  • Your occupation. People who work in high-risk occupations generally have to pay more for cover. For example, someone who works on a construction site would typically pay more for cover than an accountant.
  • Whether you choose an agreed value or indemnity value policy. The benefit you receive under an agreed value policy is agreed upon when you apply for cover, while the benefit amount under an indemnity value policy is worked out based on your income at the time you make a claim.
  • Your benefit amount. The higher the benefit amount you are eligible to receive, the more you will have to pay for cover.
  • Your age. The older you are, the greater your risk of accidental injury and therefore the higher your premiums.

Photo by Dawid Sobolewski on Unsplash

Was this content helpful to you? No  Yes

Recommended guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site