Personal accident plans help you and your family in the case when you experience injuries, deaths, and disabilities. There are several factors to consider when buying a personal accident plans, which we briefly discussed in the past. You can buy personal accident plans in several ways. Firstly, you can buy them as a standalone plan. Personal accident riders, on the other hand, are complementary plans that you add onto your existing plans to enhance your plan coverage. The question is -should you buy standalone personal accident plans or personal accident riders to your other existing plans? In this article, fundMyLife lists various considerations to make when deciding which to buy.
Range of products
If you choose to buy standalone personal accident plans, there is a great variety out there. Besides the mainstream life insurance companies you can buy from, e.g., Great Eastern, Prudential, AIA, you have the option of getting standalone plans from companies that you would not immediately think of. Specialized general insurance companies like MSIG, Chubb, AIG, and Etiqa come to mind. Banks also work with mainstream insurance companies, so the product offering is similar. For example, DBS with Manulife, UOB with Prudential, etc.
You’ll also have the choice of purchasing these plans online. Online-first companies like FWD allow you to purchase standalone personal accident plans from their website. On the other hand, riders are, well, riders and require you to have an existing main insurance plan to ride on. The implication is that the rider is limited to whichever main plan that you purchased.
Speed of claims
While buying standalone plans gives you a larger range of companies, it is also important to consider the speed of processing claims. How fast your claim processes makes a whole world of difference, bringing you peace of mind if it is fast and never-ending anxiety of it is slow.
Our research indicated that it takes generally a longer time to claim from general insurance companies than the mainstream ones. More specifically, it takes, on average, 14-21 days and 10 days for payouts for general insurance companies and mainstream insurance companies respectively. The reason for difference in speed might be due to having a personal financial adviser servicing your claims vs financial service representatives from companies.
It’s tangential, but an equally important consideration when you are deciding between standalone personal accident plans and personal accident riders.
Rather than paying outright for a new plan, there is the option of adding riders onto your hospitalization or medical insurance. As such, riders are relatively cheaper since these are meant to complement the main plan you purchase. However, personal accident riders have lower claims payout and have more restrictions in general. You will have to check the fine print to see what you are and are not covered.
Flexibility and convenience
When you get a new personal accident plan, or any plan for that matter, you are usually subjected to medical underwriting. Don’t take our word for it – we used “usually” because it really depends on the insurance company.
Another consideration is flexibility. Riders will continue as long as you maintain your main policy. As such, if you choose to surrender your main policy, you will have to give up your rider benefits as well. It is like losing two things at one time. However, with a standalone plan, you keep things separate, allowing you more options in adjusting your portfolio.
After our discussion, the question is: which is better? At the risk of sounding like a cop-out, the answer is…it really depends. You have to consider your budget, lifestyle, and other existing plans that you have. While you can use calculators on comparison sites to figure out what you need, nothing beats good old-fashioned financial advisers. And we just happen to have a curated pool of credible and incredible advisers.
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