Personal Accident & Illness vs Life Insurance: What Small Business Owners Should Know

Running a small business often means relying on your own ability to work. But what happens if you’re injured or fall ill and can’t earn an income? Losing the ability to work, even for a short time, can put a small business under serious strain.

That’s where Personal Accident & Illness insurance comes in. It’s a practical option that offers direct income support when you’re unable to work. Yet many small business owners still confuse with Life insurance and they aren’t fully aware of what this cover can offer.

The difference between Personal Accident & Illness and Life Insurance

Many business owners think Personal Accident & Illness insurance and Life insurance offer the same protection. Both policies do share similarities. For example, both types of cover can provide a payout in the event of death or permanent disability. However, Personal Accident and Illness insurance provides cover when you are unable to work and not eligible for Workers’ Compensation insurance.

There are some key differences between Personal Accident and life insurance that small business owners may not be aware of:

	Personal Accident & Illness	Life Insurance
Cover	Provides cover for the insured’s income.	Provides cover for the insured’s life.
Policies pay out when	The insured is unable to work due to injury,illness or if they pass away.	The insured is diagnosed with a terminal illness or passes away.
How a policy pays out	Weekly Payments over a predetermined period. Limits apply.	Paid in a single lump sum
Responsible Underwriter	General insurance companies	Life insurance companies

Double Impact: More accessible and more benefits
Life insurance is a personal decision and a type of cover that is not mandatory. Premiums vary and eligibility often depends on age or medical history. Business owners can consider this type of insurance to protect their livelihood, family and business. If they pass away, it can help those who’ve survived them to clear business debts and even provide cash flow.  

Personal Accident & Illness insurance works differently. Medical conditions don’t affect eligibility, and pre-existing conditions are simply excluded from cover. That makes it a faster and sometimes more affordable way for business owners to protect their income if illness or injury keeps them from working.

Personal Accident & Illness insurance comes with great extras.

Policy perks can make a real difference to small business owners. Most Personal Accident policies offer useful extras that can help insureds get back to work, like transport assistance and rehabilitation. If you are 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 small business owners 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. Personal Accident & Illness helps protect them from injury or illness.

Are newly self-employed.
Individuals who are just starting their businesses may not have the financial information available to complete a traditional income protection application.

A Personal Accident policy may be a good alternative as clients do not need to supply as much information.

Need a backup plan for their business.
Some Personal Accident policies may provide an agreed value (up to $4,00 per week) to help pay expenses. This can be used for anything related to the business.

BizCover’s Personal Accident & Illness insurance

BizCover makes Personal Accident & Illness insurance simple, fast, and accessible for small business owners. Cover is available for thousands of occupations across industries, including professional services, trades, allied health, retail, IT and more.

Through BizCover, small business owners can:

• Compare quotes instantly from leading Australian insurers
• Get cover online in as little as 10 minutes
• Receive weekly benefits that may cover up to 85% of your income
• Receive 24/7 protection from accidents or illnesses that happen anywhere around the world
• Apply with no medical history required (pre-existing conditions are excluded)

Over 270,000 Australian SMEs already trust BizCover to protect their income and secure their peace of mind. You can join them by heading to bizcover.com.au and compare multiple Personal Accident & Illness quotes for free. Switch to BizCover today and find out how much you can save today.