Explaining Personal Accident & Illness vs. Life Insurance to your SME clients

Losing the ability to work, even temporarily, could jeopardise your SME clients’ livelihood. Your clients may be considering ways to protect their income should an injury, permanent disability, or serious illness makes it impossible for them to work.

To many SMEs, life insurance might seem like the logical way to protect their financial wellbeing. However, it may not be the ideal way to safeguard their ability to earn a paycheque. Personal Accident & Illness might be a better option, but many SMEs have low awareness and understanding of what this product could do for them.

“They’re the same thing, right?”

It’s understandable that you might hear this question from your SME clients.

Personal Accident (PA) insurance is not as well-known as other types of personal insurance, like home, car or health insurance. It also provides cover that is similar in principle to many life insurance policies—namely, cover for permanent disability and a death benefit.

However, there are key differences between Personal Accident and life insurance that your clients may not be across:

	Personal Accident	Life Insurance
Cover	Protects a client’s income	Insures a client’s life
Policies pay out when	The client is unable to work due to injury or illness or if they pass away.	The client is diagnosed with a terminal illness or passes away.
How a policy pays out	Weekly Payments over a predetermined period	Paid in a single lump sum
Responsible Underwriter	General insurance companies	Life insurance companies

Double Impact: More accessible and More Benefits

Personal Accident & Illness insurance may be more accessible for some SME clients.

Life insurance (and income protection available through these policies) is typically unavailable or cost-prohibitive for clients with poor medical histories or over a certain age. However, PA policies are not impacted by medical issues and all pre-existing conditions are excluded. This makes PA insurance the cheapest form of income insurance for many insureds.

Personal Accident comes with great extras.

Policy perks can be a selling point for many small business clients. Most PA policies offer useful extras that can help insureds get back to work, like transport assistance and rehabilitation.

If your SME client is permanently disabled and unable to return to their current line of work, a PA policy may help them enter a new field. Some policies reimburse fees for professional associations and unions that the insured can no longer use. They may also offer retraining assistance to help the insured transition to a new career.

Who is Personal Accident & Illness designed for?

Many SMEs find the cover provided by a Personal Accident policy useful. However, it may especially be beneficial to small business owners who:

Can’t purchase Workers’ Compensation
Sole traders can’t purchase Workers’ Compensation in some states because they are not considered employees. PA helps protect them from injury or illness.

Are newly self-employed.
Clients who are just starting their businesses may not have the financial information available to complete a traditional income protection application.
PA may be a good alternative as clients do not need to supply as much information.

Need a backup plan for their business.
Some PA policies provide an agreed value (up to $3,500 per week) to help pay expenses. This can be used for anything related to the business.

Personal Accident & Illness insurance may appeal to a diverse range of SME clients, including consultants, tradespeople, IT professionals, retail shop owners, and many more.

BizCover for Brokers’ Personal Accident & Illness offering

Our Personal Accident & Illness offering covers over 5,000 occupations—such as Allied Health, Trades & Services, Retail, and many more. The B4B platform boasts a broad appetite:

Instant quote & bind options from up to 3 insurer partners – DUAL, Point and QBE
Limits up to $5 million
Illness cover up to age 65; Accident up to age 70
Weekly benefits up to $3,500
Death benefits up to $250,000

You can also bind multiple products for your clients with the B4B platform using just a single data entry. Help your clients fully protect their small business by binding Personal Accident, Public Liability or one of five other products at the same time.

Ready to streamline your broking process? Sign up now to get started.

Any advice provided is general advice only and does not take into account the personal objectives, financial situation or needs of you or your client. Always read the Product Disclosure Statement or Policy Wording (available on our website).