Personal Accident Insurance in Malaysia – A Beginner’s Guide
Is it worthwhile getting a Personal Accident Insurance policy? What differentiates it from SOCSO and Life Insurance? Read our full guide to see what Personal Accident Insurance is!
What is Personal Accident (PA) Insurance?
Personal Accident (PA) Insurance is an annual policy which provides lump-sum compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. Unlike life insurance (which covers any type of death), PA Insurance is completely policy dependent. It pays a benefit due to death which helps protect loved ones against the inevitable devastating loss of income that will occur if a member dies unexpectedly.
Premiums of PA insurance policies are also generally cheaper than Life Insurance, due to a more restrictive policy. Purchasing PA Insurance is a good way to protect your family and dependents, however, because it does not cover death by natural causes, if such things concern you it might be a good idea to augment it with a Life Insurance policy. PA Insurance can either be taken for yourself or a group policy for your family. 24-hour worldwide coverage is also provided.
I make SOCSO / PERKESO contributions, do I still need Personal Accident Insurance?
The Social Security Organization (SOCSO) or Pertubuhan Keselamatan Sosial (PERKESO) in Malaysia is an organization which provides insurance coverage against job-related injuries and disabilities, workplace accidents, occupational diseases and death. In short, this scheme provides protection to employees who suffer from an an accident or an occupational disease arising out of, and in the course of, his employment. It covers accidents while at work, accidents while travelling, accidents during emergency and diseases caused by nature of work.
One might think that this is enough. However, accidents can happen anywhere and anytime. Assuming that your job-related activities are covered by SOCSO, and even then, payouts such as the disablement benefit and disability pension are limited to under RM3,000 a month. How confident are you that you will remain accident-free elsewhere, or that the sums provided by SOCSO as compensation be enough for your dependents? PA Insurance helps to add to that degree of assurance, no matter the place, time and amount.
For more information on SOCSO contributions and benefits, take a look at our full SOCSO Guide.
Where can I get a PA Insurance policy?
In the past in Malaysia, PA Insurance products were purchased directly from insurance companies, but these days they underwrite policies which are then distributed by the big banks (many of them related companies), Pos Malaysia and even telecommunication companies like Maxis, Digi, Celcom and the Tune Group.
How much does it cost?
The cost of a PA Insurance policy depends on several factors such as the length of coverage, compensation, additional coverage on exclusion, age (premium can rise with age), occupation (Class 3 jobs have a higher risk than Class 1 and 2), what activities you normally do, health history and number of people who benefit.
What should I be aware of?
When you choose a PA Insurance policy, you should be aware of the following things:
Ensure the policy gives you what YOU need. Different insurance companies will provide different coverage benefits. PA insurance normally covers the following: accidental death, permanent disablement, temporary total or partial disablement, medical expenses, corrective surgery, hospitalisation benefits and funeral expenses.
As mentioned perviously, PA Insurance is a more restrictive policy than life insurance in which you have to keep a very close eye on the coverage. For example, if the policy states that it covers death and disablement caused by accident, the keyword here is accident. If the death or disablement is not caused by an accident, the policy does not apply.
Besides the coverage, exclusions of the policy are also important. You have to be aware of it as well to avoid dispute in the event of claim for the compensation. Death or injury caused by the following events are usually excluded from the policy: war risks, suicide and insanity, terrorism, self-inflicted injury, influenced by liquor, drugs or narcotics, provoked murder or assault, illness and disease like AIDS, HIV, childbirth, pregnancy or miscarriage, involvement in unlawful activities, hazardous sports, operating or riding a two-wheel motor vehicle.
These exclusions vary among different insurance companies. However, some insurance companies do provide coverage for some of the exclusions mentioned above such as hazardous sports, murder or assault (unprovoked) and terrorism provided that it is not of mass destruction. As expected, the premium must be higher. The larger the area of coverage, the higher you have to pay for the insurance premium.
Scale of benefits and sum insured
Scale of benefits is the amount of compensation payable by the insurance company in the event of injury to or loss of limb, sight or hearing. You have to be clear with the scale of benefits offered under your PA Insurance, as it determines the proportion of compensation based on the loss suffered. For example, the loss of one eye can be fixed at 100% of the insured sum, while another insurance company may only pay 50% of the insured sum, 100% for both eyes. It is best that you compare the scale of benefits offered by different insurance companies.
PA Insurance is a benefit plan which is unlike indemnity policies like motor or fire insurance, where one cannot put a defined value on an individual’s life or loss of body part. The sum insured normally depends on the individual’s annual earnings. As a rule of thumb, the highest insurable sum of a PA policy is based on 6-7 times the individual’s annual earnings.
You have to fully disclose all material facts in your application form like your health, occupation and number of PA policies currently held.
Evidence and all supporting documents should be submitted along with your claim. If the information is found to be misleading or incorrect, your claim may be void and the insurance company can have the option of taking legal action against you.
Who can apply for PA Insurance?
Most people are eligible to apply for PA Insurance. However, some details such may differ depending on the policy.
People who aren’t eligible to be covered under PA Insurance are those with high career risk i.e: the police,miltary and law enforcement officers, divers, pilots or crew members, aircraft testers, racing drivers, fishermen. People who fall under this category usually have their employer take a special form of PA insurance for them. The payment of compensation to the employees is at the discretion of the employer.
Insurance companies typically categorise occupations or professions into 3 main classes:
Class 1: Professions and occupations involving indoor work and of a non-hazardous nature like accountants, administrators, architects, doctors, indoor sales staff, clerks and the like.
Class 2: Professions and occupations involving indoor work with occasional manual work or involving some outdoor work like bakers, hairdressers, waiters, outdoor sales staff, electronic engineers, civil engineers and the like.
Class 3: Professions and occupations involving light manual work or the use of tools or light machinery (other than wood working machinery), like butchers (no slaughtering), fishmongers, motor mechanics, kitchen workers, hawkers and the like.
The premium payment will be priced according to the classes of occupation. Class 3 has the highest occupation accident risk, followed by Class 2 and Class 1. As such, the higher benefit coverage personal accident plans (which normally covers RM500,000 for accidental death or permanent disablement) will not cover Class 3.
Takaful vs PA Insurance
Personal Accident Takaful and Personal Accident Insurance are economically similar in a sense that they are both annual plans that protect you or your family members with compensation in the event of death, disablement or injuries arising from an accident.
The difference is the concept of Takaful, in which you contribute a sum of money into a general Takaful fund in the form of participative contribution Tabarru’. Participants of the fund ‘agree’ to help each other when they are involved in an accident resulting in death, disablement or injuries. Besides that, if you have not made any claim during the period, you can get a share of the surplus in the general takaful fund at maturity, based on a pre-agreed ratio between you and the Takaful provider.
Alice purchases a PA Takaful for 2 years coverage, but she didn’t make any claim during these 2 years. The Takaful provider has a total surplus of RM8million and total general contribution of RM20million. Alice’s contribution for the year is RM500 and the pre-agreed sharing ratio for the surplus is 50:50. Therefore, at maturity date, Alice can get a share of the surplus as below:
Surplus sharing ratio = 50% x (RM8million/RM20million)
Surplus attributable to Alice = 20% x RM500
Before reading the next part where we review PA Insurance products in Malaysia, first see if you can get some free PA insurance! See our Free Personal Accident Policies in Malaysia Guide.
Personal Accident Insurance Plans Quick Navigation
Top Personal Accident Insurance Plans offered by Mobile Network Providers
Top Personal Accident Insurance Plans offered Directly by Insurers
Top Personal Accident Insurance Plans offered by Banks
The Top Personal Accident Insurance Plans offered by Mobile Network Providers
We’ve laid out the top PA policies ordered by Annual Premium per RM10,000 cover, and for ease of comparison seperated them by provider type (even if all policies are actually underwritten by Insurers, they are distributed widely across different types of providers including banks, mobile network companies and insurers themselves.
|Provider||Plan Name||Annual Premium||Coverage Amount||Premium/RM10k cover||Extra Coverage|
|Celcom||Personal Accident Insurance Plan||RM12.00||RM38,000||RM3.16||-|
|Maxis||Personal Accident Insurance Plan 1||RM60.00||RM180,000||RM3.33||Snatch Theft, Phone Bill|
|Maxis||Personal Accident Insurance Plan 2||RM24.00||RM70,000||RM3.43||Snatch Theft, Phone Bill|
|DiGi||PA1||RM72.00||RM160,000||RM4.50||Income Protection, Snatch Theft, Phone Bill|
|DiGi||PA2||RM72.00||RM50,000||RM4.80||Income Protection, Snatch Theft, Phone Bill|
|DiGi||PA Family||RM72.00||RM160,000||RM4.80||Family Cover, Income Protection, etc.|
|Tune||PA Insurance||RM76.80||RM100,000||RM7.68||Higher Coverage, Medical, Funeral, Double Indemnity etc.|
Celcom – Lowest Premium Rate (but also low coverage) Personal Accident Insurance Plan
Eligible Person: Selected Celcom Postpaid users who are principle account holders, excludes supplementary plan and data stand alone bill plan (no age limit).
|Go To Celcom|
Celcom provides the cheapest premium for its Personal Accident Insurance Plan. However, not everyone can get this promotion as selected Celcom Postpaid customers will get an SMS notification from Celcom to invite them to join this promotion. So if you get this message and interest to join, you have to reply the SMS by typing “PA ON” and sending it to 28881.
The plan only provides basic coverage at RM38,000 for accidental death and permanent disablement, and is not flexible to allow you to choose your coverage amount or purchase 2 plans under your name. If you think that RM38,000 compensation in the event of an accident not enough for you, then you have to choose another which suits you.
The coverage of this plan will terminate immediately when your Celcom line or account is suspended, disconnected or terminated by Celcom whatever reasons, or you subsequently subscribe to MAA Takaful, the previous Celcom policy underwritten by MAA Takaful will be superceded by the new one.
Maxis – Personal Accident Insurance Plan – High coverage
Eligible Person : Maxis and Hotlink customers who have a registered principal line with minimum 6 months tenure and are between 18-70 years old
|Go To Maxis|
Maxis provides two plans which are both among the cheapest in the PA Insurance market. The inclusion policy is less restrictive than Celcom, where any Maxis and Hotlink postpaid customers with minimum 6 months tenure can apply through SMS by typing “BUY PA” to 27007, unlike Celcom you do not need to wait for the notification message from Maxis.
Upon successful purchase of the policy, an M-money account will be automatically created for you. The insurance premium will be charged to your postpaid bill or Hotlink airtime, and the premium amount will be automatically converted into M-money.
Having the Snatch Theft Benefit means the plan will cover you for loss of wallet, purse, or other bags in your possession at the time together with the contents therein or loss of any valuables or jewellery worn by you at the time as a result of the same being snatched away by an unknown person, including any attempt thereof. Robbery means where, in order to commit a theft, or in committing the theft, or in carrying away property obtained by theft, for that end, voluntarily causes or attempts to cause death, hurt or wrongful restraint, or causes in fear of instant death, or of instant hurt, or of instant wrongful restraint or at the time of committing the extortion, commits the extortion by causing or putting in fear of instant death, of instant hurt, or of instant wrongful restraint to you.
Top Personal Accident Insurance Plans offered Directly by Insurers
Small amount of benefit coverage:
UniAsia - Maxi Pro PA Plan
Eligible Person : Anyone who resides in Malaysia between the ages of 18 to 60 is eligible for this plan and it is renewable up to the age of 70.
|Go To UniAsia|
UniAsia provides the cheapest premium for its Personal Accident Insurance Plan among the major insurers, but even then it comes out below those offered by mobile networks. The cheapest premium rate of RM18 per annum covers just the minimum basic accidental death and permanent disablement only.
This plan is exclusively for individuals, which means that your spouse and/or children will have to buy a separate policy for their own coverage. If RM25,000 isn’t sufficient for you, you are allowed to take more than one PA Insurance policy. The benefits are paid in addition to any other insurance plan that you may have elsewhere only for “Death and Permanent disablement”, which means that you get multiple payouts.
If you have an existing PA with UniAsia, you cannot convert your existing PA policy to this plan because each PA poicy offered has different features, which correspond to the premiums charged. So, you may enrol in this Maxi Pro PA Plan and alternatively either choose to continue your existing PA until expiry or terminate and opt to receive a refund.
Range of amounts of benefit coverage:
Kurnia Insurance - Perfect 10 Personal Accident Insurance
Eligible Person : Malaysian or Permanent Resident of Malaysia aged 30 days to 65 years old, Children below 18 years old are eligible for Plan 1 and 2 only.
|Go To Kurnia|
Kurnia provides 10 plans for you to choose from which provides varying amounts of coverage. The accidental death and permanent disablement coverage from small amount of RM25,000 up to RM1,000,000.
While the premiums (for a comparable amount of cover) are higher than UniAsia, Kurnia’s plans cover more benefits and free extensions coverage.
Large amount of benefit coverage:
AXA Insurance - SmartCare VIP Plan
Eligible Person : Individuals carrying out work under Class 1 occupation are eligible for Plan 1, 2 & 3 whilst those under Class 2 occupation can insure under Plan 1 and 2 with the age from 18 to 65 years old, renewable up to 75 years.
|Go To AXA|
If you need large coverage amounts of over RM1 million for accidental death and permanent disablement, AXA might be a better choice for you. Besides the comprehensive amount of coverage, it provide other add-on benefits too.
This plan takes care of all the necessary medical treatment due to accidents, hospitalisation and clinical treatment, wherever you are. In addition, if you choose alternative treatments, this plan also covers Chinese medication and services of a bonesetter as well as crutches and wheelchairs, and post-hospitalization weekly nursing care to ensure you get back on your feet as soon as you can. AXA will pay up to the sum insured for medical expenses for each accident and there is no limit to the number of claims made in any one year.
You may opt to buy an additional cover for weekly benefits in the event you are totally unable to work temporarily as a result of injuries due to an accident by paying a little more premium starting from RM100. It cover up to 104 weeks with coverage amount starting from RM500.
Top Personal Accident Insurance Plans offered by Banks
RHB Bank - Essential Personal Accident Plan
Eligible Person : Individuals aged 18 to 65 years and renewable up to 70 years
|Go To RHB|
RHB provides 5 plan which you can choose either one that suitable for you, but the lowest coverage plan starts from RM100,000 coverage for accidental death and permanent disablement. If your coverage need is under this minimum coverage, you may go for Kurnia Insurance with more other benefits or UniAsia Insurance with the basic coverage.
Hong Leong Bank – Personal Accident Plan
Eligible Person : Malaysians, Permanent Residents, Work Permit/Employment Pass Holders or otherwise legally employed in Malaysia and their Dependents between 18 to 65 years old (renewal up yo age of 70).
|Go To Hong Leong|
Hong Leong provides a plan that is quite competitive in the market, but it comes out quite low on our top table comparison here.
If you aim for the best value-for-money cover, be sure you understand what you want to be covered for. A cheaper policy may offer a budget coverage with a lot of limitations and restrictions. However, that limited scope may be all you need, especially if the payment for extra coverage overlaps with another insurance policy.