At the risk of sounding cliched, accidents can happen any time in your life, be it big or small. It ranges from spraining an ankle while running in MacRitchie Reservoir, to being crushed by a heavy container at work. How does one cope with life after these accidents? That’s where personal accident plans come in – to assist with outpatient medical expenses, provide assistance during recuperation, and – if death is involved – a peace of mind to tide loved ones through. We have written quite a bit about these plans in the past, but not what comes after. In this article, fundMyLife talks about what to do after a personal accident – in order of severity of injuries.
#1 Not dead, and okay
Chances are, you’re injured but the injury is not so bad that you need to be warded. For example, the earlier example where you sprain your ankle running in MacRitchie Reservoir. In this case, you can claim your out-patient treatment. On top of that, your mobility aids like wheelchairs or crutches are covered.
What to do after a personal accident that doesn’t hurt you too badly? Go get some rest. You’ll heal up soon enough.
#2 Not dead, but temporarily disabled
Temporary disabilities leave your body intact, i.e. no limbs missing, but you are unable to function in your everyday job after the accident. That’s a relief. However, temporary disabilities come in two forms – total and partial. The difference between the two is the extent of your injuries that hinder your ability to carry out your work. As the terms suggest, the former is when you cannot carry out your tasks at all whereas the latter is when you can partially carry out your job.
In either case, the temporary disability feature of the personal accident plan kicks in and provides weekly cash payouts usually up to 104 weeks (that’s two years). Temporary disability benefits do not come as a lump sum. Note that you have to be employed in the first place to benefit from the weekly cash payouts, and that your temporary disability has to be longer than 7 days. With that, you can take your time to rest and recover. After recovery, you can get back to work as usual.
According to one of the advisers we interviewed, he regretted not taking a plan that had weekly payouts while he recuperated from an injury. He had to rely on his colleagues to get things done, until he recovered a few weeks later. However, he was grateful that his personal accident plan covered the outpatient treatment nonetheless.
#3 Not dead, but permanently disabled
Permanent total disabilities refer to conditions where you lose both of either limbs, lose your eyesight in both eyes, a combination of previous two, or loss of both hearing and speech. On the other hand, partial permanent disabilities are when you lose one of your limbs. The difference in the payout between the two types of permanent disabilities is huge, as the payout for partial permanent disabilities has a large variation.
It is useful to examine the compensation table by the insurance companies you get your plan from. For example, losing both eyes entitled you to full payout whereas losing only one eye will give you 50% of the sum insured.
As opposed to the weekly payout under temporary disability, permanent disability comes with a lump sum payment. This is where things become really serious. Depending on your disability, the world will be different for you now. All you have left is the sum of money to tide you through. What to do after a personal accident like this?
Coping with post-accident life really depends on the disability. If you lose eyesight in both eyes, you can no longer do computer work, for example. The next best course of action would be to attend courses that retrain you for gainful employment. Organizations like the Singapore Association of the Visually Handicapped offer courses for the visually handicapped to operate computers. On top of that, you will have to readjust your finances from not being able to do your previous job and/or lowered earning potential.
This part is for the family member of the deceased. Now that a family member is deceased, what’s next? Hopefully, the loved one had a personal accident policy with death benefits. In addition, it is helpful to have a trusted financial adviser who can assist you with claims. For death claims, in general (don’t take our word for it – check the fine print from companies), you have to submit several documents to prove that there was a death and that you’re related to the deceased.
- Death claims form
- Death certificate
- Proof of relationship to deceased
- Copy of insurance policy
From our research, it usually takes 14 days for the company to get back to you regarding the status of the claims. After that, the claims officer will advise if there are any more documents required after processing.
Getting the money is the first of many parts, so what’s next? The lump sum of money will help in the short run, but ultimately you’ll need to figure your next move. Death of a loved one is tragic, and more so if he/she was the breadwinner. While the lump sum may seem a lot, it is meant to cover monthly expenses and fixed monthly expenses like mortgage. That said, if you purchased mortgage insurance you can worry less about mortgage payments.
In general, your immediate aim is to settle any outstanding debts and managing a healthy cashflow for the family for the next few months. That means no unnecessary risks like investing that lump sum, especially products without liquidity (we’re looking at you, ILPs and endowments).
Regardless of whichever stage of injury you are in, personal accident plans come in handy to tide through difficult times. While we do not wish anyone to be in the fourth category, it is nonetheless wise to prepare yourself for the worst. In any case, we have come to the end of the article, and we hope that you now know what to do after a personal accident. If you’re still unsure about what you need, why not ask our curated pool of trusted financial advisers?
Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.
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