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What is personal accident cover?

Personal accident cover could be the perfect solution if you’re worried about the financial implications of suffering serious injuries.

 - 5 Min Read
Last updated and fact checked:
What is personal accident cover?
  • Personal accident cover pays out a lump sum if an accident leads to serious injury or death.
  • Nearly 36% of older people say their main worry is falling, which can lead to injuries like hip fractures.
  • Personal accident cover won’t usually pay out an underlying medical condition caused your injury.

FAQs: Personal Accident Cover

  • What does personal accident cover mean?

    Personal accident cover pays out a lump sum when a person suffers serious injury or accidental death due to an accident. It is not to be confused with add-on products for car insurance. Personal accident cover is a stand-alone product.

  • What does personal accident cover include?

    Personal accident cover is a type of injury insurance that pays out if you suffer a serious injury or accidental death. For example, you will typically receive a payout for injuries like bone fractures, including hip fractures, and severe burns. This can provide a financial cushion after a potentially life-changing injury.

  • Is it worth having personal accident cover?

    Personal accident cover could be an affordable way to ensure you don’t experience financial hardship if you suffer an injury that requires a long, expensive recovery. It also provides the peace of mind that your loved ones will be looked after if you suffer accidental death. 

    Unlike life insurance, personal accident cover doesn't pay out if death occurs due to illness, but it might be an affordable choice for generally healthy over 50s.

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As we age, we must be aware of the increased risk of serious accidents and injuries. For example, older people are more likely to experience falls due to issues like balance problems and vision loss. But even if you're perfectly healthy, you might suffer an accident through no fault of your own. 

About 36% of older people in the UK say falling over topped their list of fears. And with good reason. Falls can result in hip fractures and months of recovery. Accidental death is another possible severe outcome, while issues like hip fractures often represent the start of a general decline in our health. 

So what can we do to protect ourselves from the potential negative consequences of accidents and injuries?

Taking out personal accident cover provides peace of mind that we will be taken care of financially if we suffer a severe injury. 

What is covered by a personal accident plan? 

A personal accident plan covers you in the event of an accident that causes injury or death. If eligible, you will receive a payout if you are injured. If you die, your loved ones will receive a lump sum payout. 

Your personal accident cover will generally payout in the following circumstances: 

  • You suffer a fracture, including hip fractures 
  • You suffer second-degree or third-degree burns 
  • You suffer dislocation 
  • You die as a result of your accident 

The exact payouts will vary depending on your level of cover. 

Your personal accident plan is a stand-alone product designed to protect you if you suffer an injury due to an accident. 

It is not to be confused with other types of products, like income protection insurance for self-employed individuals, or life insurance policies, for example. 

What are the benefits of personal accident cover? 

Personal accident cover provides you with a lump sum if you suffer a severe injury due to an accident. This one-off lump sum can help you navigate life with your new injury as you recuperate. 

For example, if your new injury prevents you from cleaning your home effectively, you could use the money to hire outside help. 

How you use your payout is up to you, but its purpose is to help you cope with an injury or permanent disability. 

Unlike other types of insurance, this personal accident cover typically doesn't increase in cost as you age and doesn't involve answering any medical or health questions. Also, many policies will cover you for all accidents, regardless of where they happen. 

Perhaps most importantly, a personal accident policy gives you the peace of mind that you will have financial support following a serious injury. 

If you're unsure about the right personal accident cover or any other insurance product for your needs, speak to a financial advisor. 

Does personal accident cover have any exclusions? 

You will need to check specific exclusions with your insurance provider. As the policyholder, you should also have access to your policy documents outlining the terms of your personal accident insurance cover

But, in general, there are several typical personal accident cover exclusions to be aware of if you decide to take out such a protection policy. These include accidents occurring as a result of: 

  • Alcohol or illicit drug consumption 
  • Dangerous behaviour such as riding a motorcycle 
  • Fractures caused due to underlying conditions such as osteoporosis 
  • A sickness that isn’t the direct result of an injury 

Other exclusions may apply too. Furthermore, there are usually time limits for claims. An injury or death must occur within a set timeframe after the accident to qualify for a payout. 

This type of insurance product covers accidents. However, it will not cover you for medical conditions which result in accidents and injuries.

Does a personal accident cover plan make sense for you?

A personal accident cover plan could be helpful if you're generally healthy but concerned about suffering a life-changing injury or death due to an accident. Accidents can happen to anyone at any time, no matter how careful we are. 

Having personal accident cover means you will receive a cash lump sum if you suffer an injury. This could help with adjusting to life after an injury. Also, if you die due to an accident, your loved ones will receive a lump sum, too. 

But, personal accident cover should not be confused with other types of insurance. For example, even though personal accident cover pays out if you die, it is not a life insurance policy.

For example, life insurance doesn't just cover you in the event of accidental death and is also generally more expensive. 

Personal accident cover is also not the same as critical illness cover, which pays out in the event of a diagnosis of specific or terminal conditions. 

However, a policy might make sense if you want peace of mind that you and your loved ones will receive financial support if you suffer an accident. 

If you decide to take out an insurance product, do your research by reading reviews of different providers and speaking to a Financial Conduct Authority registered financial advisor.

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