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Personal Accident Insurance
If you get injured, personal accident insurance can help to ease your financial stress. But there are more comprehensive plans, such as income protection insurance, that'll also cover you if you get sick.
Personal accident is designed to pay you if you are injured and unable to work.
There are a few different types of personal accident insurance. Most income protection policies offer this cover as an add-on, but HCF offers it as standalone cover.
It has similarities to income protection insurance but it only covers you for accidental injuries – not if you get sick or injured.
What is personal accident insurance?
Personal accident insurance, sometimes called personal injury insurance, is an insurance policy that pays you a financial benefit if you're injured in an accident.
It's designed to ease some of the financial stress that can occur after a serious accident – for example, because you're temporarily unable to work or face expensive medical bills.
Finder survey: Do Australians of different ages think life insurance is worth it?
Response
75+ yrs
65-74 yrs
55-64 yrs
45-54 yrs
35-44 yrs
25-34 yrs
18-24 yrs
No
75.86%
70.29%
64.53%
50.26%
38.58%
41.74%
37.11%
Yes
24.14%
29.71%
35.47%
49.74%
61.42%
58.26%
62.89%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023
How does personal accident insurance work?
You pay a monthly fee and, in exchange, your insurance company promises to pay a financial benefit if you ever suffer a serious injury.
If you buy standalone personal accident insurance, you'll likely get the financial benefit as a lump-sum payment upon injury. For example, you may receive $3,000 if you break your arm.
However, if you buy personal accident insurance as part of a wider income protection policy, you'll receive a monthly payment that is designed to replace a portion of your typical income while you're unable to work. Learn about the differences between personal accident cover and income protection.
When you buy your policy, you also set a waiting period and a benefit period.
Waiting period
This is how long you have to wait after your injury before you can begin claiming. For example, you might set a waiting period as short as seven days or as long as two months.
Benefit period
This is the length of time you can claim the benefit for. Usually, the maximum length you can claim monthly benefits is either two years or five years, depending on the insurer.
What does personal accident insurance cover?
Standalone personal accident insurance typically covers a specific list of injuries, including the following:
Fractures
Dislocations
Loss of limbs
Burns
Some illness
Loss of sight
If you buy personal accident insurance as part of a wider income protection package, you may also be covered for illnesses that put you out of work, such as the following:
Cancer
Paralysis
Stroke
Demensia
Heart attack
Remember, specific benefits will vary between insurers, so be sure to read the product disclosure statement (PDS) carefully before buying personal accident insurance.
You pay the same price as buying directly from the life insurer.
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We've done 100+ hours of policy research to help you understand what you're comparing.
Types of personal accident insurance
There are several types of personal accident insurance. You can buy cover as a standalone product or as part of a larger income protection package. If you buy personal injury insurance as part of a wider policy, you may also receive a financial benefit for illness rather than just for injury.
The table below shows the four types of personal accident insurance, what's typically covered under each policy and the type of payment you'd receive if you ever had to claim.
Type of cover
What's covered?
Payout type
Standalone personal accident insurance
Specific injuries due to accidents – e.g. fractures, burns and dislocations.
Injuries and illnesses that put you out of work temporarily.
Monthly income replacement
Personal accident insurance vs income protection
Personal accident insurance usually (though not always) pays you a lump sum if you're ever seriously injured. You might break your arm and be able to return to work the next day, but you'd still get your benefit.
Income protection insurance pays you a monthly benefit if you're ever too sick or injured to work. For example, if you were diagnosed with cancer and had to take three months off, you'd be able to claim a portion of your typical income as your benefit.
Personal Accident
Only covers accidental injuries
Usually comes with a maximum benefit period of 5 years
Can be cancelled by your insurer
Income Protection
Covers you for most injuries and illnesses
Can pay you until you turn 65
Can't be cancelled and will typically continue to renew so long as you keep paying
Speak to an insurance specialist to help you find personalised cover
What affects the cost of personal accident insurance?
If you buy standalone personal accident insurance, you'll typically pay a set price depending on your age. For example, you may pay $20 per month up until the age of 65. After that, your premiums may increase at a steady rate for every subsequent year.
However, if you buy an income protection policy that includes cover for illness as well as injury, your premiums will be calculated taking a range of different factors into consideration, including the following:
Your age
Your overall health
Waiting periods
Your income
Benefit amount
Frequently asked questions
Personal accident insurance, sometimes referred to as personal injury insurance, covers you for loss of income if you're temporarily unable to work because an injury. Unlike workers compensation, this cover is typically available regardless of whether or not the injury is due to your work.
The waiting period is the time you would have to be off work before the policy begins. For personal accident insurance this is typically between 7 and 28 days.
Personal accident cover pays for a set period of time, making it easier to manage your living expenses such as bills or any ongoing loan payments. Payouts can offer financial peace of mind for the self-employed and contractors who aren't covered by workers' compensation. Also, policies can be more affordable compared to full income protection, especially if you avoid any policy add-ons such as a death benefit.
Depending on which personal accident insurance policy you buy, you may be able to claim your benefits as a tax deduction.
Personal accident insurance is not tax-deductible if
The policy is through superannuation
The policy benefit is paid as a lump sum.
If you need to make a claim on your personal accident insurance, you should contact your insurer as soon as possible as each company has a slightly different claims process.
Typically, you'll be asked to supply some documents before your claim can be approved. These may include the following:
A doctor's note or medical statement
An x-ray or CT confirming your injury
Proof of ID, such as a birth certificate or driver's licence
Once you have given your insurance company the documents it needs, your claim will usually be processed and approved within a few days.
This varies from policy to policy, but most personal accident insurance policies cap benefits at around 70%-85% of your wage.
What would happen if you were suddenly injured? Maybe you fell off your bike and broke your leg or were hit by a car while crossing the road.
Would you be out of work for a while and have to face medical expenses? Would your family fall behind on the bills or have to go into debt to cover healthcare costs? Would you need to hire someone to help around the house or pick your kids up from school?
If you answered yes to any of these questions, it might be worth considering personal accident insurance.
In certain circumstances, you may suffer an injury but will be unable to claim on your personal accident insurance. These circumstances include the following:
James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, WIN News, Insurance News, 7NEWS and The Guardian. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
James's expertise
James has written 247 Finder guides across topics including:
Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
Gary Ross's expertise
Gary Ross has written 699 Finder guides across topics including:
If you're self-employed, then you should consider accident and sickness insurance. It can protect you in the event that a serious injury prevents you from working.
If you play sports or lead an active life then consider personal accident insurance. You can compare cover from Australian insurers here too.
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