Your MONEY or your LIFE
Your MONEY or your LIFE
if you are not careful, you might lose both !
What your accident plan does NOT cover.
By Mr Tenzin Quek CLU, ChFC.
Published in Airbyte, a Windsurfing magazine, Aug '98 issue
Ever since the recent freak accident in which the windsurfer died due to head injuries, there has been a greater awareness of the need to have adequate protection against such risk. Right-of-Way rules have been emphasized to all windsurfers and some have been known even to wearing a bicycle helmet before they go out to windsurf. However, despite whatever precautions we take to minimize our risks, accidents due entirely to the fault of a third party or 'acts of God' still and do happen.
Thus this is where the importance of having an adequate insurance cover should be emphasized. Accident plans are among the cheapest type of insurance in terms of the sum assured. It is thus not worth scrimping the few dollars and risk losing not just our life but also our future earning potential as well.
We should always bear in mind that insurance is bought for the purpose of peace of mind. However, buying the right type of insurance requires careful planning. It makes little sense to buy the biggest umbrella on offer only to discover it has full of holes when it rains. An adequately sized but waterproof umbrella will suffice instead. Hence, having a good agent will be able to help you source for the appropriate coverage you need so as to give you complete peace of mind and truly enjoy your windsurfing or other sports without worry
However it is imperative to note that the onus is on the life assured to declare any material fact that may affect the underwriting decision. Proposal forms commonly found in newspaper cuttings and credit card advertisements that ask minimal questions may be subject to more stringent queries and exceptions should claims arise later. Therefore, always make sure that the accident plan you are taking up is adequate and complete, by checking with a professional or a person who is knowledgeable in such matters.
To find out if your accident plan is comprehensive, ask if it excludes:
- Injuries caused by drowning, food poisoning or gas inhalation that are not due to violent external visible means. Such cases may not have any external sign of injury as required in most contracts. For windsurfers in particular, do check the clause on drowning.
- Death or injury due to harmful insects or snake bites (shark bites?). In another freak accident, a man's vital organs were bitten off by a tortoise during his swim. It is not known if he was covered for that part of his body.
- Natural perils such as lightning strikes. Incidentally Singapore has the world's highest chance of being strike by light-ning. However some insurance companies are silent on such issues.
- Unlawful acts. This is usually interpreted to exclude claims due to acts such as theft or robbery. However in times of urgency, does it cover jaywalking or speeding? Our laws are notoriously strict and if the insurance company insists or abiding by the contract to the letter, tedious and expensive lawsuits may result in times of claim.
- Intoxication. Most companies exclude accident claims under the influence of alcohol or drugs unless prescribed by registered medical practitioner. However, if you are a non-drinker, you may want to ask if you would want to subsidize the premiums of those who do. Do remember that there is no free lunch and you will have to weigh the benefits of the plan against what you are paying.
It is not possible to cover fully all details of the contract clauses. Just for note, statistics show that only 1 out of 7 claims are due to accidents and the rest are due to illnesses. Interestingly also is that the premium of accident plans are the same wh ether you are age 25 or 55. However, in terms of the impact of damage upon the life of the victim, the difference between a person disabled at 25 years old and at 55 years old, is a world apart. Thus, not only are accident plans usually cheaper in terms of the sum assured, they are often a vital component of young adults' insurance planning during their prime of life.
