Income protection style
policies are unfortunately often completely
overlooked by many customers.
Personal
accident cover usually comes a poor
fourth, behind your car, household
and travel insurance. Whilst having
these three certainly makes a great
deal of sense, if you don't have an
income, you will find that your car,
home and holidays will soon become
a thing of the past anyway.
Personal
accident insurance normally offers
a lump sum benefit for permanent injuries,
onto which can be added a weekly benefit
for temporary injuries. Sickness cover
can then also be included. It is important
to note that personal accident policies
usually provide benefits for a period
of 104 weeks for accidents and 52
weeks for sickness. If longer term
cover was required, you should consider
a full income
protection insurance instead,
which will offer weekly payments through
to retirement.
Income
protection cover can be provided for
your net monthly earnings, or alternatively
you can opt for a smaller benefit
that you believe will be sufficient
to live on. This means that cover
can be taken out just to to help protect
a loan or mortgage repayment. As an
alternative however, a
mortgage
payment protection insurance will
usually offer unemployment cover as
well, although the benefit cannot
be extended to your full earnings.
Below
is an example of a typical personal
accident benefit scale:
| Benefit |
Sum
Insured |
| Death |
£25,000 |
| Permanent
loss of eye(s) |
£25,000 |
| Permanent
loss of limbs(s) |
£25,000 |
| Permanent
total disablement |
£25,000 |
| Temporary
total disablement (accident) |
£250.00
per week for up to 104 weeks |
| Temporary
total disablement (sickness) |
£250.00
per week for up to 52 weeks |
Some
policies may also offer what is known
as the 'continental scale', which
offers lump sum benefits for minor,
permanent injuries. e.g.
| Benefit |
Sum
Insured |
| Loss of one big
toe |
£2,000 |
| Loss of any other
toe |
£1,000 |
| Loss of one thumb |
£5,000 |
| Loss of one forefinger |
£4,000 |
| Loss of any other
finger |
£2,000 |
| Loss of use of
shoulder or elbow |
£5,000 |
| Loss of use of
wrist |
£4,000 |
| Loss of use of
hip, knee or ankle |
£4,000 |
| Removal by surgical
operation of lower jaw |
£6,000 |
Premiums
for personal accident insurance
are normally rated on your occupation,
not your age. Age limits of 65 (accident
cover) and 55 (sickness cover) are
typical. Children can obtain cover
for the lump sum benefits in the
name of a parent or guardian.
Cover
for groups such as football and
sports teams can be arranged under
a group personal
accident policy.
