In this article, we are going to talk about personal accident insurance, types of accidental insurance, why you need personal accident insurance, and many more. We’ve made the content very long in a bid of providing all your needs
What is Personal Accident Insurance?
Personal Accident Insurance policy provides complete financial protection to the insured members against uncertainties such as accidental death, accidental bodily injuries, and partial/total disabilities, permanent as well as temporary disabilities resulting from an accident. In the case of the accidental death of the policyholder, the nominee gets 100% compensation from the insurer.
Simply put, a personal accident insurance policy is a type of general insurance that provides benefits in the case of accidental death, disability, and injury. The benefits usually cover all phases of suffering an accident, from evacuation to hospitalization and treatment, rehabilitation, and recovery.
There are various other compensations that are offered for an accidental disability such as loss of eyes, limbs, and speech.
An accident does not come knocking at the door. It can happen anytime, anywhere, and may result in minor to serious injuries. Any such uncertainty may lead to a financial crisis, and that is why it is recommended to buy an Accidental Insurance policy.
It will provide the necessary financial assistance to you and your family against accidental death, bodily injuries, and disabilities (Partial/ Permanent/Temporary).
There are various other rider benefits such as accidental hospitalization cover, Hospital Confinement Allowance, and Medical Expense Cover.
You can secure yourself against accidental death and disability with personal accident insurance. Purchase the best plan at Policy Bazaar and save medical expenses. At Policy Bazaar:
- One can compare Accidental Insurance plans from Top Insurers
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- Get Instant Personal Accident Cover Online
Alarming Statistics about Accidents in India:
Nearly 1214 road accidents occur every day in India. In recent years people have become more prone to accidents than they would have ever imagined?
As per the Ministry of Road Transport and Highways, there were 4.64 lakh accidents alone in 2017. And nearly 1.47 lakh people died due to accidents on Indian roads.
And there was a rise of 1.68% in accidents in 2018, as per the recent reports.
Types of Personal Accident Insurance Policy
Accidental Insurance Policies can be further divided into two sub-heads. Here’s a quick rundown of the two variants:
Individual/Personal Accident Insurance:
This type of policy guards an individual in case of any accidental damage. It covers accidental death, loss of limbs or sight, or other permanent disabilities resulting due to an accident.
Group Accident Insurance:
Group Accident Insurance is taken by employers to get coverage for their employees. Depending on the group size, some insurers also provided a discount on the premium.
It is a good incentive/ value-added advantage for small organizations as it is available at a low cost. However, this is a very basic plan and may offer limited benefits compared to an individual plan.
Accidental Insurance Coverage
You can avail of the following coverage benefits with a personal accident insurance policy –
Accidental Death Cover
An accident can be both emotionally and financially devastating for the dependent family members. In case of fatal injuries, the entire sum assured is paid to the nominee as mentioned in the policy document.
Permanent/Total Disability Cover
In case an accident results in permanent disabilities or lifelong total impairment such as loss of both limbs, then a specified sum insured amount is paid to the policyholder.
Permanent Partial Disability Cover
If bodily injuries, result in permanent partial disabilities, then a certain percentage (up to 100%) of the benefit is paid to the insured.
Temporary Total Disability
In case the insured meets with temporary total disabilities and is bedridden, then the insurer will provide a weekly allowance to recompense the loss of income. The insured can also utilize this claim amount to pay the EMIs, in case there is a loss of earnings.
Why Choose Personal Accident Insurance?
A minor accident can indispose an individual temporarily, while major ones can have a severe impact on one’s life and overall well-being. It has become imperative to buy a sound insurance plan to protect yourself against any such untoward perils.
A Personal accident insurance policy is designed keeping to offer some relief to the injured person or a dependent.
Personal Accident Insurance Cover offers compensation in the event of demise, bodily injuries, impairment, or mutilation resulting from an accident.
Compensation is provided in case of an accident while traveling through rail, air, road, drowning, or due to a collision, bodily injuries, burn, etc.
A personal accident insurance policy offers financial support to the policyholder in case of accidental disabilities, irrespective of the intensity of the incident.
Compensation is provided to the insured against accidental demise, impairment, and dismemberment because of an accident.
In case of unfortunate accidental death of the policyholder, the best personal accident insurance plans in India help the dependent members by providing them financial assistance.
In case of impairment resulting from an accident, the policy-holder will also get compensation for the loss of income. It ensures peace of mind as it guards against the most unexpected events.
Other benefits include hospitalization cover, hospital bill payment, compensation of ambulance cost, etc.
Advantages of Personal Accident Insurance Policy
Imagine a situation, you are hit by a motor vehicle and are permanently disabled? There would be no monthly or annual earnings but bank EMIs, medical expenses, and other expenditures.
To deal with such an emergency situation, it is advisable to get a personal accident insurance cover. Here’s a quick rundown of some of the major advantages of buying a personal accident insurance policy:
- Family security
- No requirement of medical tests and documentation
- Substantial coverage at a lower premium
- Worldwide coverage
- Both individual and family plans are available
- The easy and certified claim process
- 24×7 support service
- Legal and funeral expenses are covered
- Child education benefit
- Double indemnity for demise/ impairment while traveling in public transport
- Availability of customizable plans
Read More about Features and Advantage of Personal Accident Insurance
Why Should You Buy a Personal Accident Insurance Policy?
You can buy a personal accident insurance cover irrespective of your age, occupation, and health. In fact, you should buy this plan as soon as you start earning.
It is more important for those who have taken loans or have to pay EMIs because this would offer protection towards repayment of the outstanding balance under any such situation.
The premium of this policy will be decided on the basis of your occupation rather than age. You can pay the premium online and make sure it does not lapse. Generally, there are 3 categories under which occupational risks can be segmented-
Difference between Accidental Insurance & Life Insurance
An accident insurance policy covers loss of life or disabilities resulting due to accidental damage. But a life insurance policy covers the death of a policyholder irrespective of the cause of death. The major differences between accidental insurance and life insurance policies are listed below:
- Death Cover: A life insurance policy offers financial benefits irrespective of the reason for death apart from suicidal attempts. An accidental insurance policy will offer compensation in case of accidental death of the policyholder.
- Death Coverage Condition: Life insurance policy offers death cover even if the insured dies months or years after the illness. Whereas, an accidental insurance policy offers death cover even if the insured dies instantly or within the specific time frame after the accident. Usually, it is 180 days from the accident.
- Plan Options: There are various plan options in a life insurance policy retirement solutions, death cover, long and short-term financial investment goals, etc. But an accidental insurance policy covers loss or damage resulting due to an accident.
- Partial Disability Cover: If an accidental injury results in partial loss of limb or sight then it will be covered by an accident insurance policy. Whereas, partial disabilities are not covered under a life insurance policy.
Difference between Accidental Insurance and Critical Illness Insurance
A critical illness policy pays off in lump sum to the policyholder to carry out the medical treatment. There is a survival period clause to avail of the benefits. But an accidental insurance policy would cover partial or total disabilities or accidental death.
Difference between Personal Accident Insurance and Term Insurance
A term insurance policy covers the death of the policyholder due to natural reasons or accidental causes. But a personal accident insurance policy would only offer coverage for death and disabilities caused by an accident. It would not cover claims arising due to natural deaths.
The cost of the premium for a personal accident insurance policy is determined on the basis of the occupation of the policyholder.
How Much Does Personal Accident Insurance Cost?
The premium varies based on the plan that you have opted for and also your age, occupation, and in some cases medical history. However, it is recommended that you opt for the sum insured amount that is 100 times more than your monthly income.
How much Accidental Insurance Coverage is enough?
As a thumb rule, it should be 100 times your monthly income. For example, if your current earnings are Rs. 10,000 then you can buy a personal accident cover of Rs. 10, 00,000.
It will ensure that all the eventualities such as child education, loan repayment, marriage, and regular earnings for the spouse are taken care of, provided the policy is renewed timely.
How to File a Personal Accident Insurance Claim?
To initiate the claim process, you need to inform the insurance provider within the specified time frame. You might be provided with a claim reference number. The following information is required to be submitted to the provider while intimating a claim-
- Your contact number
- Policy number
- Date and time of the accident
- Name and contact details of the insured person who is injured
- Location of the incident
- A brief description of how the accident/ loss took place with its location details
- The extent of the loss
It is essential that these details are known to the family members or dependents (including spouse) also as an unexpected event such as demise may put them in situations where they are unaware of what to do next.
In case of an Accidental death/ impairment claim, the following documents are required to be submitted-
- Death certificate
- Post-mortem report
- FIR report
- Medical certificate
- Medicine bills
As a necessary precaution, policyholders can ensure that these details are kept for future reference of the family members so that they are not left helpless or any advantage unclaimed in the event of an unexpected event leading to a coma or even demise.
Additional Benefits of Personal Accident Insurance Policy
In addition to the four primary benefits, there are various other benefits that come with a personal accident insurance policy. Some insurers may provide these benefits in the basic plan or you can buy them as an add-on cover by paying an extra premium:
- Hospital Daily Cash: Daily cash allowance is paid to the insured in case of an accidental hospitalization. Coverage is limited to a certain number of days (as specified in the policy terms and conditions).
- Ambulance Expenses: Compensation is provided for ambulance charges to carry the insured post-accident to the hospital.
- Transportation or Repatriation of Mortal Remains: In case of accidental death of the policyholder, the nominee would receive the expense incurred on repatriation and transportation of the mortal remains from the site of the accident to the hospital, home, or the cremation ground. Compensation is also provided for the expenses incurred on the religious ceremonies related to cremation.
- Broken Bones: In case of fractured bones or any bone damage, a fixed compensation is payable under the policy.
- Burns: Compensation is also provided for accidental burns.
- Family Transportation Allowance: It is applicable when the hospital is too from the insured’s residence. In such instances, the actual transportation expenditure incurred by the immediate family members, to reach the insured person is also compensated. The total reimbursement payable is subjected to the amount specified in the policy.
- Education Advantage: In case of the unexpected demise of the policyholder, the cost of education of the dependent child is covered up to a specified limit.
- Loan Protector: In the event of unexpected demise or lifelong disabilities, a lump sum amount (specified in the policy schedule) is paid.
- Adaptation Allowance (also known as Home Alteration and Vehicle Modification Benefit): Some insurers may offer this benefit. In case of permanent total disabilities or dismemberment due to an unfortunate event, money has to be spent to modify one’s house, and/or a vehicle is also covered.
Tax Benefits under a Personal Accident Insurance Policy
Section 80D of the Income Tax Act 1961 does not provide any tax benefit for the premium paid for personal accident insurance plans that offer protection against any physical disability, dismemberment, or accidental demise.
However, it is important to understand that the primary reason for buying any kind of insurance is protection and safety. Insurance decisions should never be driven by tax considerations.
How Can Personal Accident Insurance Help?
Just as you care about what would happen to your loved ones after your demise you should equally think about how would they manage in case of permanent disability? Prepare yourself for unexpected situations with the right coverage.
We, at Policy Bazaar, offer a range of personal accident insurance plans from different companies that can be tailor-made as per the customer’s needs. Policy Bazaar additionally also offers assistance to buy the selected plan
A personal accident insurance policy offers coverage against accidental injuries and death. However, such plans won’t cover natural deaths and deaths resulting due to a disease.