Lead an active life? Personal accident insurance may be worth the investment.
Australians love their sports. It's a fun way to get fit, feel some adrenaline and stay in shape for years to come. While being active can go a long way to reducing your chance of heart disease and other illnesses it also comes with the increased risk of accidents and potentially debilitating physical injuries, especially when competing at a high level. Sports personal accident insurance can help counter this risk.
What does sports personal accident insurance cover?
Sports accident insurance is a specific type of cover for athletes and sporting participants. This type of insurance is specifically designed to help offset sports risks so you can enjoy an active life. In the event of you being injured while competing you may claim benefits including:
- Medicare gap cover. This is the medical expenses that aren't covered by Medicare. This can include elective surgeries, additional diagnostic scans, physiotherapy and other treatments that could make the difference between a partial and a full recovery. Where you are able to claim benefits from a private health insurance policy this type of cover can still pay out, although the benefits may be reduced by the amount already paid.
- Inability to work. In the event of an injury that leaves you unable to work, either temporarily or permanently, you can claim income replacement benefits for a specified period of time.
- Lump sum benefits. If you suffer a specific type of injury you may be awarded lump sum benefits. The size of the payout depends on the type of injury, generally expressed as a percentage of the total lump sum.
The combination of benefits makes it a versatile and practical type of policy. It can work hand-in-hand with existing insurance to specifically cover gaps and deliver an important level of cover for sports participation.
What types of sporting injuries can I get covered for?
Some plans can provide you with a lump sum payment to cover for injuries. Depending on the policy, you may be covered for:
How much is generally covered for these types of injuries?
|Fractures||Hips or pelvis||$10,000 - $20,000|
|Skull||$7,000 - 15,000|
|Lower leg, kneecap or ankles||$5,000 - $10,000|
|Forearm or sternum||$4,000 - $8,000|
|Wrist, hand, foot, jaw, shoulder blade; collar bones||$1,500 - $3,000|
|Cervical fractures e.g. neck||$1,500|
|Ribs, cheekbones, eye sockets, nose||$500 - $1,000|
|Dislocations||Hips||$7,500 - $15,000|
|Wrist, elbow, knee, ankle||$1,500 - $3,000|
|Shoulder||$500 - $1000|
You may also be able to claim lump sum benefits for specific types of injury or loss. More serious events will pay larger portions of the sum insured, while less serious ones will pay out partial amounts. In the event of multiple injuries you may be able to claim more than one partial benefit, not exceeding 100% all up.
Full vs partial benefits
Accident cover will protect you from various types of injuries, however the amount you receive will vary based on the type of injury.
Situations where you'll receive a 100% payout of your sum insured
The most serious types of injuries can pay out the full sum insured. These can include:
- Paraplegia or paralysis
- Total permanent disability
- Total permanent blindness
- Permanent loss of multiple limb
- Permanent and incurable insanity
Situations where you'll receive a 50-75% payout of your sum insured
Partial benefits of these percentages may be paid for injuries such as:
- Permanent total loss of hearing
- Total loss of a hand or single limb
- Loss of an eye
Situations where you'll receive less than 50% payout of your sum insured
These may be as benefits such as 1% per toe lost, or as much as 40% for losing four fingers on one hand. Other injuries covered in this range can be:
- Fractured or broken bones
- Loss of use of limbs or joints
- Shortening of a leg
- Partial loss of hearing or partial blindness
In addition to these benefits, a policy may also provide specific cover for "non-Medicare expenses"
Note: These percentages are given as a general guide. For payout details in regards to your policy, make sure you consult the product disclosure statement (PDS) of your policy.
What are non-Medicare expenses?
These are costs that cannot be claimed through Medicare, Australia's largely free public healthcare system. Medicare is specifically designed to cover only essential treatments, and essential costs, but these might not be enough for you to make a full recovery. For example, a doctor might recommend knee surgery following an accident to prevent you from having a limp, but it might not be strictly necessary. This may therefore qualify as elective surgery, and as such might not be covered by Medicare. Even if it is, there might be a very extensive waiting list until you can get the treatments done in a public hospital. Sports personal accident insurance can therefore cover similar things to health insurance. Where non-Medicare expenses are also claimable under your private health insurance policy, personal accident insurance might still pay out the typical amounts minus the sums paid through health insurance. Some of the specific non-Medicare expense cover that athletes may benefit from can include:
- Private hospital treatment
- Dental treatment
- Elective surgeries
- Specialists and alternative treatments, such as osteopathy, naturopathy, physical therapy and more.
Generally, you will need to have been referred to a specialist by a medical practitioner in order to claim those treatment costs, and any medical expenses claimed will usually need to have been at the recommendation of a registered practitioner.
What should I look for when I select cover?
If you decide that you can benefit from having personal accident insurance cover in place, you should compare policies by both price and cover. This means comparing a range of plans from different providers in order to find the one that suits your needs. Comparing areas such as:
- The level of coverage: This specifically refers to the amount you are insured for, and how much the policy can pay out in the event of a sporting accident. If your life insurance or income protection policy doesn't cover you while playing sports, and you are using a sports personal accident policy to fill in, then your sum insured might need to be roughly equivalent. To your Medicare gap cover needs, consider the limits of any current health insurance policy, as well as the specific extras and hospital coverage it affords.
- What you are covered for: Naturally you need to know what exactly you are covered for. Policies may vary, and it's essential to compare both the payout conditions and any exclusions which may apply.
- Exclusions and restrictions: These can indicate how suitable a policy is for you. For example, "no professional sports cover" may be a specific exclusion that greatly affects its suitability.
- The cost of the cover: Policies need to be within your budget, so you need to make sure you check and compare the price of any personal accident insurance plans you are considering. The cost of cover can vary based on a number of factors, including the insurance provider you choose, so it can be worth knowing about the factors affecting costs.
How are prices determined?
Your prices may include both premiums and an excess. The excess, any applicable waiting periods and policy exclusions can all have a major impact on price. Other factors determining your specific premiums can include:
- Your age
- Your overall health
- Whether you are getting cover for any pre-existing conditions
- Your income
- Your sum insured
- What kind of sports you play
What is not covered by sports accident insurance?
A range of policy exclusions may apply. Sometimes these can be very specific, such as not covering heart attacks after the age of 35, while others can be more general and commonly found. Some of the more common exclusions can be:
- Riots or other civil commotion, or acts of war
- Taking part in any aerial activities other than as a passenger on commercial flights
- Any deliberately self inflicted injuries
- Any sexually transmitted disease
- Any criminal acts
- While under the influence of drugs, alcohol or any medication other than those prescribed by and taken in accordance with the advice of a medical practitioner
- Pre-existing medical conditions
- Directly or indirectly resulting from loss or damage to health aids or prosthetic devices. For example, the cost of damage to false teeth or injuries resulting from damage to false teeth.
- Any psychological disorders
- Any act of terrorism
What are some of the other limitations of this policy type?
In some other specific instances you may not be able to claim benefits either. If another individual or organisation is liable for the costs, and you agree not to seek compensation then your insurer may deny claims. For example, if you are egregiously injured by another athlete while competing, to the extent that they are legally liable for your injuries, you may be required to seek compensation in order to claim benefits under this type of policy. The benefits that may be payable can also be limited or reduced by other factors, depending on the benefit. For example, income replacement benefits will typically:
- Require you to actively seek a return to employment
- Have a specific time limit
- Have a waiting period which applies before you can start claiming
Many policies will also not cover you for taking part in or training for a professional sport, defined as where the insured derives the majority of their income from that sport. For example, a professional football player or coach would not be covered for injuries relating to football, but would still be covered for other sports. Here, you might need a specialised professionals policy.
Am I covered for professional sports?
Specialist insurers can provide personal accident insurance, and a range of other cover types for pro athletes. This type of cover may be taken out through a club or organisation on behalf of players, or a professional might seek their own cover. These may function in similar ways to combined life insurance policies, blending a range of cover types together including trauma insurance, life insurance, personal accident cover, income protection and disability benefits. Generally, mainstream insurance providers will hesitate to insure athletes as a result of the high risk nature of their occupation. These specialist insurers can offer similar cover, even for pro players. Many will also peripheral financial services, such as budget planning and investment management to help players manage finances wisely.
What can personal accident insurance do for active individuals?
If you live an active life, whether professionally or as an amateur player, a sports personal accident policy may deliver an important level of protection, especially if your existing life insurance won't cover you while playing sports. With this sort of cover, you can go all out on the field, in the surf or almost anywhere else with peace of mind. You've probably seen, or experienced, a few sports injuries in your time. If you've ever been glad to be able to walk away from something, this type of cover might be right for you, and means you won't have to give up what you love for fear or injury or disability.