Spot the difference: understanding personal accident and healthcare insurance

Most people in Hong Kong are aware that having adequate insurance is necessary aspect of modern life. In today’s busy world, there are so many things to think about – such as travelling for business, protecting personal property, looking after your home and even anticipating accidents and illnesses. All of these require insurance to help you weather any financial storm that blows your way as result of the unforeseen.

Two of the more commonly confused types of insurance are healthcare insurance and personal accident insurance. After all, if you have an accident during a skiing holiday and break your leg, the cost will be covered by your existing healthcare insurance plan, right? Well, not necessarily.

In this article, we’re going to explain the fundamental differences so you get a clear grasp of each type and can more easily decide which type of insurance best suits your needs.

The key aspect of personal accident insurance policy is to provide you or your family with financial support if you are permanently or temporarily disabled or even die as the result of an accident. Support comes in the form of a lump-sum payment, which is paid as a percentage of the amount according to different body disablement stated in the policy’s Summary of Benefits and up to HK$1 million.

For example, Mr Leung is driving his car home from work and has an accident. Unfortunately the crash was so severe that he lose his left leg below the knee. He needs extensive surgery followed by months of physiotherapy. As a result, he has to take six months off work to recover. Luckily for Mr Leung and his family, his personal accident insurance policy covers this scenario, and he is given a lump-sum payment of HK$1,000,000 for his permanent disablement to help him get through his recovery – both physical and financially. His policy also covers medical expenses up to HK$20,000 per accident and has a hospital confinement allowance.

With healthcare insurance plans, the most important thing to know is they are designed to cover the cost of medical expenses for inpatient or outpatient treatment. There is a huge variety of healthcare insurance plans on the market today. For example, some may focus on supplementing existing healthcare plans, such as those provided by an employer. Others are focused on providing extra support in the case of extended periods of hospitalisation or financial relief during lengthy recovery periods.

Take this scenario as an illustrative example: Angel goes cycling with her friends in Tai Po. Unfortunately, she is hit by a cyclist, breaking several bones in her arms and legs, as well as other damage. At hospital, the doctors realise that Angel’s spine has been fractured and she will need to stay in hospital for a number of weeks – possibly months – while they assess the extent of the damage. Luckily for Angel, she had purchased both medical insurance and hospital cash plan, the plans cover the cost of her hospitalisation and provide her with a daily cash benefit to relieve her financial pressure as she lost her income while hospitalisation.

So as you can see, there are major differences between healthcare and personal accident insurance. The important thing for you is to assess which type is best suited to your circumstances.

If you’d like to find out more about personal accident plans, please feel free to contact us or find out more about our insurance plans:

View product

Read more: Staying fit and healthy when working from home

Learn more about EASY Claims and file your claims online anytime, anywhere.

EASY Claims – A simpler and faster way to claim!