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The difference between health insurance and personal accident insurance

Health insurance and personal accident insurance are among the most common insurance products. One might wonder why personal accident insurance exists these benefits can be offered through health insurance.

However, each has some characteristics that distinguish it from the other. These characteristics will help you understand the differences between health insurance and personal accident insurance. Thus, helping you make a decision as to which you should be purchasing. 

Personal Accident Insurance Cover

Insurance companies provide Personal Accident plans to protect you in case an accident occurs. The large amount paid out is one of the most attractive aspects of Personal Accident cover.

About 10% of the lump sum is usually set aside for medical expenses. However, it still depends on your selected cover. Additionally, the medical expenses only deal with accident scenarios. This means you will not be covered if you contract any type of illness.

Health Insurance

Unlike its counterpart, health insurance caters to both accidents and illnesses. In short, it is designed to cover any health-related issue.

A majority of the insurance companies offer personal accident plans as part of Health insurance. It means that a lump sum will be paid out in case of the occurrence of the insured risk.

Are There Other Differences Between Personal Accident & Health Insurance?

A health insurance cover delivers more value especially since it is not limited to accidents but also accommodates illnesses. This makes it a more suitable option for those who also want an insurance package that will cover them if they fall sick.

On the flip side, the extra features available in a health insurance cover make it more expensive than personal accident cover.

  • Death

This is one of the areas where personal accident policy beats a health insurance policy. In the event of your death, your family or selected beneficiary will be awarded the sum assured. Health insurance does not provide such an offer.

  • Disability

Sometimes people suffer severe injuries that may leave them with a disability. Personal insurance policies usually offer a disability cover. This is available to those suffering from a disability caused by an accident.

The policy provides a cover where the premium is a specified portion of the selected sum insured. Different insurance firms may cover different disabilities under their personal accident policy cover.

Health insurance does not offer any insurance cover over any disabilities. This means that a personal accident policy is the one to go with if you consider disability as a factor to insure against.

  • Available add-ons

Insurance companies offer different premiums and plans to cover different scenarios. Insurance companies also provide add-ons or riders that allow you to add more benefits to your already existing insurance policy.

Think of riders or add-ons as extras that are offered so that you can tailor the insurance policy to your preference. Examples of riders for a health insurance policy include personal accident cover; room rent waiver, hospital cash cover, and critical illness cover.

The fact that personal accident cover can be added as a rider means the insured can enjoy its benefits even while on a health policy by simply topping up the monthly premium.

*The advice offered in this column is intended for informational purposes only and not intended to replace or substitute for any professional, financial, legal, or other professional advice. If you have specific concerns or a situation in which you require professional help, you should consult with an appropriately trained and qualified adviser.

Sim Kwang Meng

Chief Operating Officer

Mr. Sim has more than 40 years’ of experience in General Insurance. He joined Pana Harrison since 2003, and specialised in Property and Casualty. Prior joining Pana Harrison, he was AGM for Commercial Union Assurance Pte Ltd.