Did you know those road accidents are a leading cause of death in India, and the country accounts for approximately 11% of accident-related deaths across the globe? While it may sound astonishing at first, it is, in fact, true. And although being a responsible driver and taking the necessary precautions certainly help, accidents always appear.
But that’s not even the worst part, as an accident can result in financial woes, injuries, disability, or even death, leaving your loved ones to deal with the repercussions. However, that doesn’t have to be the case if you invest in personal accident insurance.
A personal accident insurance policy provides financial assistance to you and your loved ones if you are involved in an accident. The insurance plan covers medical expenses and offers monetary compensation if the accident results in disability or death.
Are you still confused about how it works? Well, be sure to keep reading, as we’re going to discuss everything there is about personal accident insurance!
Overview of Personal Accident Insurance
As you know, accidents are unpredictable and unfortunate, but investing in personal accident insurance is a great way to secure your and your loved ones’ future financially. This is because a personal accident insurance policy provides financial coverage against injuries, disabilities, and even death resulting from an accident.
Here’s an example:
Let’s say that Harsh, a 34-year-old man from Delhi, gets into a car accident that causes bodily injuries. Assuming that Harsh has personal accident insurance, the insurance provider will cover the medical costs that he incurs, including hospitalization charges, ambulance fees, etcetera.
Similarly, if Harsh suffers an impairment, such as loss of limbs or loss of sight, he will be eligible to receive monetary compensation from the insurer. However, if Harsh dies in the accident, his family (or the stated nominee) will get a death benefit from the insurance provider.
But does personal accident insurance only cover road accidents? No, it also covers accidents resulting from explosions, fires, drowning, plane crashes, etc.
Additionally, the policy works like all other insurance policies, as you must pay a premium to avail of the benefits, with certain inclusions and exclusions. The premium amount depends on some factors, such as your age, profession, and the plan’s features.
Types of Personal Accident Insurance Policy:
There are two broad types of personal accident insurance policies.
Individual Accident Insurance
Individual accident insurance ensures financial coverage against unforeseen events such as accidents causing physical injuries, permanent partial disability or permanent total disability, and accidental death.
Group Accident Insurance
Group accident insurance offers employees protection against the medical expenses incurred due to injury or death from an accident at the workplace.
Accidental Insurance Coverage
Many insurance companies sell accident insurance, which can be purchased as a single separate policy or accompanied by an existing insurance policy.
Accidental Death Cover
Accidental death insurance is usually added as an accompanying rider to a health insurance or life insurance policy. It covers the unintentional death or dismemberment of the insured.
Permanent/Total Disability Cover
A permanent total disability cover will guard the policyholder when such situations arise. Such insurance products offer an income to the policyholder when they become unable to work due to a disability.
Permanent disability has been defined as one of the following:
- Permanent loss of use of a sensory organ.
- Loss of two or more limbs due to injuries at or above the ankles or wrists.
Permanent Partial Disability Cover
A permanent partial disability is a result of an illness or injury that is fully disabling. This means that an individual with a permanent partial disability can perform a few, but not all of their ordinary work and personal tasks.
Worker’s compensation often ensures coverage for this particular type of disability.
Temporary Total Disability
Temporary total disability focuses on the injuries or illnesses that affect an individual completely, for a temporary period of time. Temporary total disability covers offer benefits to the policyholder if they are unfortunate in such a situation.
Disabilities here are recoverable usually within a year.
Inclusions and Exclusions of Personal Accident Insurance Plan
If you’ve previously purchased a life insurance or health insurance policy, you would have gone through its coverage benefits, also commonly known as inclusions and exclusions. Being familiar with the policy’s features and terms & conditions is always important, and the same applies to personal accident insurance.
Inclusions Personal Accident Insurance Plan
- Medical expenses, including hospitalization charges
- Accidental death
- Total or partial disability
- Accidental dismemberment
- Child education expenses
- Ambulance charges
- Financial cover against fractures, burns, and broken bones
- Life support costs
- Legal and funeral expenses
Exclusions Personal Accident Insurance Plan
- Self-injury or suicide
- Pre-existing medical conditions
- Pregnancy or childbirth
- Accidents occurred under the influence of intoxicants
- Accidents due to war or terrorism
- Non-allopathic treatments
- Accidents resulting from adventurous activities
- Natural death
- Hospitalization expenses for medical treatment
While these are the standard or common inclusions & exclusions of a personal accident policy, it also depends on the type of plan you choose and the insurance company. However, it is best to opt for personal accident insurance policies offering maximum inclusions at lower premiums.
Read More: What is General Insurance?
Best Personal Accident Insurance Plans
|Insurer||Personal Accident Plans||Age (in years)||Policy Term||Coverage Amount ( in Rs)||No Claim Bonus|
|Aditya Birla Capital||Activ Assure Personal Accident Plan||5-65 years||N/A||up to 12 times of annual gross income for earning individuals||N/A|
|Bajaj Allianz Insurance||Bajaj Allianz Personal GuardPlan||N/A||Annual||10-25 lakhs||Up to 50 %|
|Bharti AXA Insurance||Bharti AXA Smart Individual Plan||18-70 years||Annual||Accidental Death Benefit: 2 lakh to 20 lakhs as per the plan variant. Permanent Total Disability: 3 lakh to 30 lakhs as per the plan variant.||N/A|
|Cholamandalam Insurance||Chola Accident Protection||18-69 years||N/A||Family: 2.5-10 lakhs |
Individual: 5 lakhs-1 Crore
|Future Generali Insurance||Personal Accident Plan||18-70 years||N/A||up to 144 times of per annum income||N/A|
|IFFCO Tokio Insurance||Personal Accident Policy||5-70 years||1 year||100% of the sum assured||5% for each claim-free year; limited to 50% of the initial sum assured|
|Kotak General Insurance||Kotak Accident Care||5-65 years||1,2,3 years||N/A||N/A|
|Liberty General Insurance||Individual Personal Accident Policy||18 – 70 years||1,2,3 years||1 lakh to 1 Crore||N/A|
|Max Bupa Health Insurance||Personal Accident Health Insurance||18 – 65 years||1 – 2 years||5 to 25 lakhs||5% for each claim-free year; limited to 50% of the initial sum assured|
|Manipal Cigna Health Insurance||Protection Accident-Care||18 – 80 years||1,2,3 years||50,000- 10 Crore||N/A|
|National Insurance||Personal Accident Plan||5 – 70 years||1 year||72 months gross pay or Rs.10 lakh, whatever is less.||5% for each claim-free year; limited to 50% of the initial sum assured|
|New India Assurance||Personal Accident Policy||5 – 70 years||1 year||N/A||5% for each claim-free year; limited to 50% of the initial sum assured|
|Oriental Insurance||Janata Personal Accident Policy||10 – 80 years||1 year||25000 to 5 lakhs||N/A|
|Religare Insurance||Secure Personal Accident Insurance Plan||18 years to 70 years||N/A||15 lakhs to 25 Crores||N/A|
|Raheja QBE Insurance||Individual Personal Accident Insurance Policy||As per the policy document||N/A||As per the policy document||5% for each claim-free year; limited to 25% of the initial sum assured|
|Royal Sundaram||Individual Personal Accident Policy (Death & Disablement Only)||18 – 65 years||1 year||5 to 75 Lakh||5% for each claim-free year; limited to 25% of the initial sum assured|
|Reliance Insurance||Personal Accident Group Insurance Policy||5-70 years||N/A||100% of the sum insured in case of permanent total disability||N/A|
|Star Health Insurance||Accident Care Individual Insurance Policy||18 – 70 years||1,2,3 years||5 to 15 lakhs||5% for each claim free year; limited to 50% of the initial sum assured|
|SBI General Insurance||Individual Personal Accident Plan||18 – 65 years||1 year||1 to 10 lakhs||5% for each claim free year; limited to 50% of the initial sum assured|
|TATA AIG General Insurance||Personal Accident Gaurd Plan||18 – 65 years||1 year with lifetime renewal||5 lakhs to 1 Crore||5% for each claim free year|
|United India Insurance||Individual Personal Accident Plan||5-70 years||1 year||25000 to 10 lakhs||5% for each claim free year; limited to 50% of the initial sum assured|
|Universal Sompo Insurance||Individual Personal Accident Policy||5 – 65 years||1 year||N/A||N/A|
Why Choose Personal Accident Insurance?
A twist of fate can arise at any time without any caution, and occasionally it is able to cause serious damage. This sort of unforeseen incident may have a sizable impact on your finances; not only can the remedy be costly, but if you suffer from any shape of disability, it may have an effect on your income’s potential. To shield yourself and your own family from one of these situations, it’s miles paramount that you purchase a personal accident insurance policy.
Personal accident insurance is useful to get monetary assistance to you and your family in the event of a twist of fate that ends in the loss of life, physical injuries, transient general incapacity, permanent total disability and permanent partial disability. In the event of demise, the insurance agency will pay 100% repayment (identical to the sum assured) to the appointed nominee. Also, the coverage organizations provide compensation for an accident disability together with loss of speech, limbs and eyes.
Advantages of Personal Accident Insurance Policy
Although an increasing number of people in India are now buying personal accident insurance, many are still unaware of this policy. Thus, it is essential to understand the advantages of investing in personal accident insurance:
Financial Security for You and Your Loved Ones
As we discussed, a personal accident policy offers coverage against accidental injuries, disabilities, and even death. So, by purchasing the insurance plan, you can ensure that you and your loved ones stay financially secure during unprecedented situations. This is all the more crucial if you have family members who are financially dependent on you, as unexpected expenses can become a burden rather quickly.
Wide Coverage at Minimal Premiums
Since personal accident insurance provides extensive coverage, most people assume that the premiums for this policy are quite high. Instead, it is quite the opposite, as a personal accident cover can be purchased at minimal premiums. This means you can secure your loved ones’ future without burning a hole in your wallet. However, you should know that the premium for a personal accident policy is based on several factors and also varies from one insurer to another.
No Medical Screenings and Zero Paperwork
When you purchase a health insurance or life insurance plan, you are usually required to undergo medical examinations and screenings. But that is not the case with personal accident insurance, as you are not required to take any such tests. Additionally, buying a personal accidental cover does not involve a lot of paperwork and documentation. All you have to do is provide identification proof and fill out an application form to get insured. Isn’t that great?!
No Geographical Limitation
Another important reason to invest in a personal accident insurance policy is that there is no geographical limitation, which is typically the case with other insurance plans. This means that no matter where the accident occurs, you can claim the policy’s benefits. For instance, whether you suffer accidental injuries in an Indian state (where you don’t reside) or in a foreign country like Canada, you will be covered by your personal accident insurance policy.
Why Should You Buy a Personal Accident Insurance Policy?
Life is unpredictable, in order to reimburse and ensure providing of financial support during times like these, a personal accident policy is a must-have. It dispenses financial support to the policyholder if he/she becomes disabled due to an accident. Some common insurance covers are life insurance, health insurance, and motor insurance. Very few of us are aware of personal accident insurance plans that turn out to be of great use, especially at the time of emergency.
How to Raise a Claim?
When you’re purchasing personal accident insurance, it is important to understand the claim process.
Step 1: Let the Insurer Know
The first thing you would need to do at the time of an accident or within 24 hours of hospitalisation, is to let the insurer know about the accident following the medical emergency. You can do it by contacting customer care services or through the website of the concerned insurance company.
Step 2: Providing Policy Documents
The insurer will then ask for all the documents related to the respective policy. Such as policy cards, purchase receipts, premium receipts etc. for obvious verification purposes.
These documents are supposed to include all the information related to your policy and its status of it.
Step 3: Providing Duly Filled Claim Form
Then, the company shall provide you with a policy claim form. Next is to fill the form with correct details with the signature of the policyholder or their nominee. After duly filling out the form, you shall submit it to the insurer or TPA.
Step 4: Submit Any Other Required Documents
Post submitting the form and policy documents, the insurer asks you to submit other verification documents like Id and address proofs etc. A copy of such documents is to be submitted to the company.
Step 5: Scrutiny by Insurer
After receiving all the documents, the insurance company will conduct scrutiny to get a better understanding of the claim and the accident, and to rule out its authenticity.
Step 6: Settlement of the Claim
Post inquiry and all the verification, if the company feels that the authenticity of the claim is legitimate, they may approve the claim. If rejected, the company asks for other documents for further verification.
Documents Required to Be Submitted in Case of Accidental Death
Death claims are often submitted by the nominee, the agent or any third person. Submitting the specified documents along the process in a proper way will ensure that you get your claim without any additional problems.
List of documents required for the same:
- The death certificate
- Original policy documents
- ID proof of the beneficiary
- Proof of Age
- Discharge form (executed and witnessed)
- Medical certificate (as an explanation of the cause of death)
- Police FIR (in case of unnatural death)
- Post-mortem report (in case of unnatural death)
- Hospital records/certificate (if the deceased died due to an illness)
- Cremation certificate and employer certificate (in case of early death)
Difference Between Accidental Insurance & Life Insurance
Many people in India believe that personal accident insurance and life insurance are the same and end up choosing one over the other. However, we should probably tell you that both these policies are, in fact, not the same. Here’s how:
- Death Benefit: One of the most notable differences between personal accident insurance and life insurance is the death benefit. While a life insurance plan offers coverage against death in general, personal accident insurance covers accidental death. For instance, natural death or death due to an illness are only covered under life insurance and not personal accident insurance.
- Tax Benefit: Another key distinction between a personal accident policy and a life insurance policy is the tax benefit. While you can claim tax exemptions (as per Section 80C of the IT Act) for life insurance plans, there are no tax benefits included with personal accident insurance.
- Coverage for Partial Disability: While a life insurance policy offers coverage for total/permanent disability, the plan does not cover partial disability. However, buying personal accident insurance will ensure that you are covered against total/permanent and partial disabilities resulting from accidents.
- Affordability: If you compare the premiums for personal accident insurance and life insurance, you will find that a personal accident policy is much more affordable. This is because a life insurance plan offers extensive coverage, whereas a personal accident policy only covers accidental death.
Difference between Accidental Insurance and Critical Illness Insurance
Personal Accident Insurance is designed to pay capital if you suffer an accident. The amount that is to be paid on Personal Accident Insurance generally is determined by the type of accident and severity of the injury.
Critical Illness Insurance, on the other hand, will pay capital if you get diagnosed with a critical illness. This also includes the potential results of a serious accident, such as losing a limb or sight. This Insurance plan pays the whole capital if your illness is dire enough to catch up on the criteria.
Tax Benefits Under a Personal Accident Policy
There is a standard misinterpretation about insurances, that they are always entitled to a tax deduction. It is true that the person insured can enjoy the benefits of tax deductions after purchasing life or health insurance. However, according to Section 80C, personal accident policies are not entitled to tax deductions.
In case the insured person meets with accidental death, the nominees on the policy receive the sum insured. This amount helps the family members of the departed, to secure and aid their financial status in times of mishap.
In times when the insured person ends up suffering from temporary or permanent disability, the personal accident cover ensures providing of daily expenses up to a certain limit.
Although personal accidental cover can be a wise option to secure the future for almost all professions, they are highly endorsed by professionals facing extremely risky situations frequently. Professions like journalists, workers in explosive industries, mountaineers, builders and contractors.
So, that concludes everything you should know about personal accident insurance policies. You can say that it is a must-have, especially because life has become so unpredictable and uncertain. Plus, as we’ve said countless times, accidents don’t knock on your door. And even if they did, you wouldn’t have a say in the outcome.
Thus, make the smart decision of investing in personal accident insurance and financially secure your loved ones’ future today!
No, there are no tax benefits included with personal accident insurance.
The common exclusions of a personal accident cover are:
Pregnancy or childbirth
Accidents resulting from intoxication
Accidents resulting from war or terrorism
Treatment for pre-existing conditions
When filing a claim for personal accident insurance, the documents you will need are a death certificate, hospital and medical bills, identification proof, a post-mortem report, and an FIR report.
No, you don’t have to undergo medical tests, examinations, or screenings to purchase a personal accident insurance policy.
As per the general thumb rule, the coverage amount for personal accident insurance must be 100 times your monthly earnings. For instance, if you earn Rs. 5000 monthly, the coverage amount should ideally be Rs. 5,00,000.
The policy can be extended to the insured individual’s spouse and dependent children