Personal Accident Insurance

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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What is Personal Accident Insurance

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.

What is Personal Accident Insurance

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What is Covered Under Personal Accident Insurance?

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: -

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1. Accidental Death Cover

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.

2. Permanent Total Disability Cover :

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.

3. Permanent Partial Disability Cover

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.

4. Temporary Total Disability Cover

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

Types of Accident Insurance Policy

The personal accident insurance policy can be divided into two categories. Let us briefly talk about both types: -

Individual Personal Accident Insurance


This is the more common type of personal accident insurance policy, where the insured opts to cover themselves against uninvited accidents. The accidental damage cover includes accidental death, loss of sight or limbs, or other permanent disabilities resulting from the accident.

Group Personal Accident Insurance


This type of personal accident insurance policy applies to a group of people who have something in common—be it employment type or location. Employers generally take these to provide coverage to their employees. Depending on the group size, the insurance company may provide discounts on the premium.

It is a good value-added advantage for small organizations as this policy is available at a low cost. However, this is only a basic plan and offers limited benefits compared to the individual plan.

Benefits of Buying a Personal Accident Insurance

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: -

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1. Dismemberment Cover

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.

2. Coverage for Burns

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.

3. Reimbursement of Hospitalization Expenses

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.

4. Daily Allowance

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.

5. Education Grants

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.

6. Reimbursement of Transportation Expenses

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 vs Health vs Personal Accident Insurance

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 InsuranceHealth Insurance PlanPersonal 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.

What is Covered Under Personal Accident Insurance?

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: -

familySecureMobile-img

1. Intentional Injury

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.

2. Injuries from Civil or Foreign Wars

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.

3. Injuries Due to Consumption of Alcohol or Drugs

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.

4. Accidents Due to Riding a two-Wheeler over 150cc

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.

5. HIV/AIDS/STDs

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.

6. Injuries Due to Involvement in Violent Public Disturbances

The involvement of policyholders in any kind of public disturbance, protest, riot, strike, demonstration, etc., can cause the personal accident insurance claim rejection.

7. Injuries on Duty with Military/ Paramilitary/ Police Force

Injuries caused due to policyholder’s duty with the military, paramilitary, or police force are also not covered under the personal accident insurance policy.

8. Injuries from Unsafe Sports

If the injuries are caused due to participation in unsafe sports such as mountaineering, rafting, bungee jumping etc., the claim will be denied.

9. Pre-existing Illnesses

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.

10. Claim Arising Out of Pregnancy/Childbirth

The claim arising from pregnancy or childbirth-related issues will not be covered under the personal accident insurance policy.

Who is Eligible?

Here are the eligibility criteria for the personal accident insurance policy: -

  • Individuals between 18 to 65 years of age are eligible for the personal accident insurance policy.
  • You can buy this policy for any family member(s).

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FAQ's

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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: -

  • Gather information at the accident scene
  • Obtain witnesses
  • Inform the details of the accident as soon as possible
  • Keep all the medical bills

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: -

  • Natural death
  • Pre-existing conditions
  • Childbirth or pregnancy
  • Suicide or self-inflicted injuries
  • Participating in war, riot, etc.
  • Participating in an unsafe sports activity

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/06072022

Sources:

www.irdai.gov.in/ADMINCMS/cms/Uploadedfiles/107.%20Ind%20Personal%20Accident_UniversalSompo.pdf

www.policyholder.gov.in/whatlifeinsurancetobuy.aspx

www.irdai.gov.in/ADMINCMS/cms/Uploadedfiles/RTI_FAQ/FAQs%20on%20Health%20Insurance%20Regulations20201106.pdf

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