You probably would have a life insurance policy to protect the financial needs of your family after your death and a medical insurance policy to act as a cushion and take care of your emergency hospitalization expenses.
But do you have personal accident insurance? Unlike other popular insurance plans, not many people are aware of personal accident insurance. Here, in this guide, you can find all that you need to know about personal accident insurance – what it is, features, benefits, which insurer and policy to choose.
1. What is personal accident insurance?
As the name indicates, personal accident insurance schemes protect the policyholder against disability or death due to an accident. Most general insurance companies offer personal accident insurance. However, these low-priced policies often take a backseat to other popular insurance schemes.
In life, we never know what will happen the next minute. An accident can occur anywhere – at your workspace, at home, on the road or anywhere else. It could lead to injury, disabilities and even death. When you suffer an accident, it not only affects you but also could cause a severe financial crisis for your family members.
This is where – personal accident insurance comes into the picture. This insurance scheme offers you financial coverage, in the unfortunate case of an accident. Personal accident insurance plans offer coverage against disablement (temporary/partial/permanent) and death due to an accident.
You can choose personal accident insurance as a separate stand-alone insurance plan or opt for it as an add-on cover to your other insurance policies like term insurance, health insurance, and more.
The personal accident insurance plan offers you complete financial protection against uncertainties in life due to an accident. Accidental bodily injuries, temporary/permanent/total disability, accidental death are all covered under the plan.
2. Benefits Offered by Personal Accident Insurance Plans
Standard Benefits – These are the benefits offered by all personal accident insurance plans.
Accidental death benefit
This is the main benefit; in fact, the primary reason for purchasing personal accident cover. If the policyholder dies due to an accident during the policy coverage term, then the insurer is liable to pay the nominee 100% of the sum assured, as per the policy terms.
Permanent total disability benefit
A permanent, irreversible disability is an injury incurred by the policyholder, preventing him/her from going back to their normal routine. Generally, all disabilities that have a time frame of over 12 months with no positive signs of improvement are considered as a permanent irreversible disability.
If the policyholder is permanently disabled, the insurer pays the sum assured to the beneficiary, as per the terms and conditions of the plan.
What constitutes a permanent total disability?
- Loss of vision in both eyes
- Complete loss of both hands or feet
- Loss of one hand and one foot
- Loss of vision in one eye and loss of one hand or foot
- Complete loss of speech
- Complete loss of hearing in both ears
- Complete loss of one limb and hearing in both ears
- Complete loss of vision in one eye and hearing in both ears
- Complete loss of speech and loss of anyone limb
- Complete loss of speech and vision in one eye
*Refer your policy document for a complete list of included permanent disabilities mentioned by your insurer.
Permanent partial disability benefit
These are disabilities that interrupt the normal living of the insured. Loss of eyesight, loss of speech, and loss of limbs are some conditions that are considered as a permanent partial disability. In such cases, the insurer pays the policyholder a percentage of the sum insured, as per the terms and conditions of the plan.
What constitutes a permanent partial disability?
- Loss of an arm at the shoulder joint
- Loss of an arm above/below the elbow joint
- Loss of a hand at the wrist
- Loss of a thumb/index finger/any other finger
- Loss of a leg above the mid-thigh
- Loss of a leg up to the mid-thigh
- Loss of a leg below the knee
- Loss of a leg up to the mid-calf
- Loss of a foot
- Loss of the large toe/any other toe
- Loss of vision in one eye
- Loss of hearing in one ear
- Loss of the sense of taste/smell
*Refer your policy document for a complete list of included permanent partial disabilities mentioned by your insurer and the percentage of sum assured for each disability.
Temporary total disability benefit
These are injuries that last for over a year, preventing the insured from carrying out their regular day-to-day activities, while also leading to a loss of income. In such cases, insurers provide daily or weekly allowance to the insured. The compensation amount is determined on a case by case basis, based on the severity of the condition.
Additional Benefits – These are benefits offered by a few insurers as an incentive to policyholders to choose their plan, over plans offered by others. Sometimes, you can get these additional benefits by paying an extra premium.
Hospital confinement allowance
Sometimes an accident may require the insured to be admitted in the hospital for a prolonged period of time. In such cases, the insurer pays a daily allowance to the insured for the period of hospital stay. Some insurers offer a pre-fixed amount, while others alter the sum based on the severity of the condition.
Hospitalization cover
If the insured person faces an accident that requires hospitalization, then the insurer takes care of the hospital bills and other medical expenses. The insurer reimburses the customary, necessary, and usual hospital expenses.
Modification of vehicle or accommodation
Sometimes an accident may cause injuries that prevent the policyholder from carrying out their day-to-day tasks without any assistance. In such cases, the insured person may have to modify their vehicle or accommodation according to their disability. For instance, a person who has lost his/her legs may require balance wheels to be fitted in their two-wheeler and rails to be fitted at home. The insurer covers the cost of making these modifications under this benefit.
Transportation of mortal remains
Under this benefit, the insurer reimburses the cost of transporting the remains of the policyholder (who passed away in an accident) to the cremation ground. The amount paid depends on the conditions of your policy plan.
Children’s education benefit
When the policyholder makes a claim, the insurer also provides a one-time payment for each dependent child of the insured for the cost of education.
Education advantage
If this benefit is offered, the insurer pays the cost of present and future education expenses for the children of the insured, up to a specific limit, as a one-time lump sum payment.
Ambulance expenses
The insurer reimburses the cost of the ambulance charges for carrying the insured from the site of the accident to the hospital.
Broken bones
If the insured fractures a bone or suffers any other bone damage in an accident, the insurer pays a fixed compensation amount.
Burns
If the insured suffers from a burn injury in an accident, the insurer pays a fixed compensation amount.
Family transportation allowance
The insurer reimburses the amount spent by the family members for reaching the hospital/accident site of the insured.
Loan protector
If the insured passes away due to an accident or is permanently disabled, the insurer pays a lump sum amount to pay off the loans of the insured.
3. Key Features of Personal Accident Insurance Plan
1. Cover for Death – In the unfortunate case of the accidental death of the insured, the insurer pays 100% of the sum assured to the nominee(s).
2. Cover for Permanent Total Disability – In the unfortunate case of the insured getting permanently disabled due to an accident, the insurer pays 100% or part of the sum assured to the policyholder. The amount payable depends on the type of policy.
3. Cover for Permanent Partial Disability – In the unfortunate case of the insured suffering a permanent partial disability due to an accident, the insurer pays up to 100% of the sum assured to the policyholder. The amount payable depends on the type of policy.
4. Cover for Temporary Total Disability – Some personal accident insurance plans also offer weekly benefit to the insured, when they are home confined due to a temporary total disability, like fracture of both limbs, etc.
5. Cover for Hospitalization – If the insured requires hospitalization for treatment of injuries due to the accident, the insurer pays a percentage of the sum assured for hospitalization and other related medical expenses.
6. Cover for Transportation of Mortal Remains – If the insured passes away due to an accident, the plan reimburses the cost of transporting the mortal remains of the insured from the spot of the accident/hospital to the residence of the insured.
7. Cover for Ambulance Expenses – If the insured meets an accident, the insurer reimburses the ambulance expenses (including air ambulance) for transporting the insured from the spot of the accident to the nearest hospital.
8. Child Education Grant – If the insured passes away due to an accident or suffers from permanent total disability, the insurer pays education benefits for dependent children of the insured. The amount offered and the number of children covered depends on the type of plan.
9. Family Member Discount – When you take personal accident insurance cover for more than one member of your family, you can avail discounts on the premium. The percentage of discount varies from one insurer to another.
10. Increase in Coverage – If you renew the policy regularly without any breaks and if you don’t make any claims during a policy year, the insurer increases total disability coverage by 5% to a maximum of 25%.
Cre: Tiamo/creditmantri.com
