Personal accident insurance is a policy that can provide you with financial protection against uncertainties such as accidental death, injuries, and partial or total disability resulting from an accident. In case of the policyholder’s unfortunate death, a lump sum amount is paid to the nominee. In this article, let us understand everything about personal accident insurance, including its types, benefits, and exclusions....Read More
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A personal accident insurance policy provides protection against death, permanent total or partial disability, and temporary disability in case of an accident. In case of death or permanent disability, the insurer pays a sum insured, and the policy terminates thereafter.
While in the case of partial disability, only a percentage of the sum insured is paid depending on the severity of disablement, whereas a weekly compensation is provided in case of temporary total disability. The personal accident insurance policy is renewable if the accident results in permanent partial disability or temporary total disability.
The personal accident insurance policy can be seen as an income protection plan where your profession and income determine your maximum cover and premium rates. Generally, you can get a maximum cover that is 10 times your annual income, and the premium rates usually depend on your profession.
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Both life insurance and health insurance products cover for specific eventualities and provide coverage to mitigate the financial implications of the eventuality. At the same time, personal accident insurance offers additional coverage for a wider range of possible accidents. It can provide coverage for loss of limbs or disabilities caused due to an accident at the workplace or while travelling, etc. This insurance policy can help you create a financially stable environment against any possible eventuality.
Let us look at some of the key things covered[1] under the personal accident insurance policy: -
An emergency such as an accident can be both financially and emotionally distressing for the policyholder’s family members. In case the policyholder suffers fatal injuries or dies due to the accident, the entire sum insured is paid to the nominee as mentioned in the policy document.
If the accident results in permanent disability or lifelong impairment such as loss of limbs, then a pre-determined sum insured is paid to the policyholder depending on the severity.
Under the personal accident insurance policy, a certain percentage (up to 100%) of the sum insured is paid to the insured in case of bodily injuries resulting in permanent partial disability.
If the policyholder meets temporary total disability and gets bedridden, the insurer provides a weekly allowance as compensation for the loss of income. The insured can even use this claim amount to pay thei
The personal accident insurance policy can be divided into two categories. Let us briefly talk about both types: -
Personal accident insurance is a useful policy to get financial assistance for yourself and your family in the event of an accident. This policy provides comprehensive coverage for accidental death or disabilities. Here are some of the benefits[1] provided under this policy: -
Most personal accident insurance policies offer the benefit pay-outs for the dismemberment of any kind occurring due to an accident. The insurers have pre-determined percentages and ratios in which the benefit is paid to the policyholder.
This is an optional extra coverage under the personal accident insurance policy. And this additional insurance covers the possible dismemberment or death due to burns. The cost of treatment is reimbursed to the insured after hospitalization.
The insurance company reimburses all or part of the expenses incurred at the hospital. All the medical expenses, room rent charges, doctor’s consultation fees, medical tests, etc., are considered for reimbursement.
Some insurance companies provide daily cash allowance for the expenses arising due to hospitalization. This allowance to meet the unexpected hospital expenses can be given for up to 30 or 45 days of hospitalization.
Depending on the insurer, the policyholder may or may not be eligible for the education grants pay-out. An additional amount to be used for tuition fee payment for the dependent children is paid out to the policyholder. This is a common benefit provided by many insurance companies.
Under the personal accident insurance policy, some insurance companies also provide coverage for the cost of transportation of the mortal remains of the insured person.
Life and health insurance products offer protection against specific financial eventualities, while personal accident insurance offers wider coverage for possible accidents. Here is a brief comparison of these three types of insurance policies: -
| Term Life Insurance | Health Insurance Plan | Personal Accident Insurance |
|---|---|---|
A term life cover[2] provides protection against the financial burden on the policyholder’s dependents in case the insured passes away. | Health insurance[3] plans provide financial aid during medical emergencies to mitigate the expenses incurred. | Personal accident insurance provides coverage for burns, loss of limbs, broken bones, disabilities, etc., resulting from an accident. |
| The death benefit is paid out on death. It is paid on maturity if you have opted for it. | The benefit is paid after the hospitalization process. It includes the ambulance charges, pre-and post-hospitalization charges, etc. | This policy pays out the benefits on death, permanent partial or total disability, and temporary total disability. |
| You should buy this policy if you are the sole breadwinner of the family. | This plan should be taken by people who are prone to health conditions, etc. | This is the right plan for individuals who may be hospitalized due to their dangerous nature of work. |
Exclusions refer to the provisions under an insurance policy that restricts coverage due to certain conditions. It includes the things that are not covered under the plan. The personal accident insurance policy also has some exclusions. They may vary with the insurer, as the comprehensive list of exclusions is only communicated to the policyholder.
Here is a general list of exclusions[1] under the personal accident insurance policy: -
An emergency such as an accident can be both financially and emotionally distressing for the policyholder’s family members. In case the policyholder suffers fatal injuries or dies due to the accident, the entire sum insured is paid to the nominee as mentioned in the policy document.
If the accident results in permanent disability or lifelong impairment such as loss of limbs, then a pre-determined sum insured is paid to the policyholder depending on the severity.
Under the personal accident insurance policy, a certain percentage (up to 100%) of the sum insured is paid to the insured in case of bodily injuries resulting in permanent partial disability.
The claim for a personal accident insurance policy will be rejected if the accident is determined to have been caused while the policyholder was riding a two-wheeler with an engine capacity of more than 150cc.
If it is found out that the accident leading to death or disability is caused because the policyholder suffers from an STD, the claim will not be honoured.
The involvement of policyholders in any kind of public disturbance, protest, riot, strike, demonstration, etc., can cause the personal accident insurance claim rejection.
Injuries caused due to policyholder’s duty with the military, paramilitary, or police force are also not covered under the personal accident insurance policy.
If the injuries are caused due to participation in unsafe sports such as mountaineering, rafting, bungee jumping etc., the claim will be denied.
If the accident occurs as a result of a pre-existing medical condition or a worsening illness, the policyholder will not receive the claim benefits.
The claim arising from pregnancy or childbirth-related issues will not be covered under the personal accident insurance policy.
Here are the eligibility criteria for the personal accident insurance policy: -
Yes, you can purchase multiple personal accident insurance policies. It is totally legal in India. With multiple insurance policies, you can haveextra protection from future eventualities. You can get the total of all the policies as per the terms and conditions of the insurance company.
The policyholder can claim the personal accident insurance policy by following these steps: -
In case of the unfortunate accidental death of the policyholder, the family receives the sum insured under the policy. This helps compensate for the family expenses, such as the children’s education.
To file a claim for the personal accident insurance policy, you should inform the insurer about the accident as soon as possible. This can also be done on the official website of the insurance company.
Yes, anyone can buy a personal accident insurance policy by submitting the required documents to the insurance company.
A personal accident insurance policy can help cover the treatment expenses arising from an accident. The policyholder can avail compensation in case of any permanent or partial disability.
The death, injury, disability caused due to the following factors are not covered in the personal accident insurance policy: -
A personal accident insurance policy is specifically designed to offer financial protection against injuries, permanent disability, or death resulting due to an accident. Moreover, substantial compensation is provided in case of accidents when travelling.
ARN NO: PCP/PAI/200223
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