Friday, July 09, 2010

FAQ - Personal Accident Insurance

In this article, I explain the coverage under a personal accident policy and why it is better than buying an accident rider to a life policy.

If you find it difficult to buy a term insruance policy, you can start with a personal accident policy (for $300,000 or $500,000) and switch to a term insurance policy at a convenient time in the future.
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4 comments:

Anonymous said...

Can you explain the differences between PA and Life Insurance? Why one should buy either or both?

Thanks!

July 09, 2010 9:29 AM
Tan Kin Lian said...

A personal accident covers death and injury by accident. Term insurance covers death by accident and sickness.

For young people, most death occur by accidents. It is easier to apply for a personal accident insurance, rather than term insurance, as the underwriting is simpler.

If you can get term insurance, it is better. But, if it is too troublesome, get personal accident first.

July 09, 2010 3:04 PM
Anonymous said...

In a nutshell, most PA covers death and permanent disabled (some even covers others) due to accident only while Life covers both death and sickness (must not be pre-existing conditions) which may arise from accident or self-inflicted (like suicide but with conditions). Another difference is that PA doesn't have a cash value while Life can have cash value.

As to why one should buy either or both, it depends on one's objective. If you want protection from death but have little cash now, then PA is a good choice. If you want both protection and some cash value plus you have extra money, you can consider Life. But do note that Life nowadays doesn't give very good return. Read Mr Tan's book and you will know 8-)

July 09, 2010 3:14 PM
Unknown said...

Dear Mr Tan,
The attached article has been around for 3 years. I've tried to find similar PA plans to no avail (Aviva, Insupermart, DirectAsia, Income, etc). The premiums have gone up it seems. Do you think it's time to have a updated article on this topic?

Thanks.

August 21, 2013 11:50 AM

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