Why do you need a personal accident insurance policy?

By
Real Estate Agent

Insurance is an important component of a safety net you acquire for the financial protection of your family and dependents due to the uncertainties of life. Insurance products can be broadly classified into life insurance and general insurance. In the case of life insurance, the basic cover is for life risk whereas general insurance provides cover for all risks other than life. The purpose of the two is totally different and the parameters too differ.

As an individual, you need both types of insurance to secure yourself and your family from financial disasters in the unfortunate event of death, accidents, medical emergencies or damage and loss by an act of man or God. When you talk of personal accident insurance policy, you are referring to a general insurance product which is designed to protect you from the hazard of accidents and its outcome.

The meaning of personal accident insurance policy:

Uncertainty is the catchword intrinsic to accidents. It is an event that can occur anywhere anytime to anyone without an iota of warning causing bodily harm or death. This policy is designed to protect you from financial ruin if you meet with an unfortunate accident, protecting you with a host of beneficial covers in the form of comprehensive insurance. So a Personal Accident Insurance policy can be expected to provide financial compensation when you suffer injury, permanent or temporary disability or death in an accident. It aims to provide financial stability to you and your family on meeting an accident.

Potential customers of Personal Accident Insurance:

Accidents being unpredictable in nature, it is imperative for every individual to be covered by a suitable Personal Accident Insurance policy irrespective of age, gender and profession. For easy understanding of a potential customer, individuals have been categorized into various risk profiles, which finally has a bearing on the efficacy of the policy and the premium set for it.

Low Risk: People falling in this category have the lowest premium rate theoretically, for the basic cover. Teachers, lawyers and white-collar professionals like bankers match such a profile.

High Risk: Persons like cash handlers, builders, engineers, motor mechanics and others engaged in similar superintending professions are placed in this profile class.

Very High Risk: Persons in explosive industries, journalists, mountaineers and similar other active individuals are in sync with this profile.

Eligibility for Personal Accident Insurance:

Having been enlightened about the different risk profiles, it is still important to know who all can be insured under this policy. As a thumb rule, any individual between the ages of 1 and 70 years is a potential customer. But to enjoy the benefits of comprehensive insurance, you have to be between the ages of 21 and 70 years.

Coverage of Personal Accident Insurance Policy:

Comprehensive insurance of this genre will offer the following key covers to you along with a few additional features.

Accidental Death: The primary cover in this insurance plan assures payment of the sum insured to the nominee in the event of death caused by an accident. Interestingly, the death need not be immediate, but within a period of 12 months from the date of the accident when the victim succumbs to the injuries solely caused in the accident within the policy period.

Permanent Total Disability: In the event of bodily harm suffered in an accident during the policy period and the outcome is a permanent total disability within 12 months of the accident and loss of occupation and capability to earn a living, you are entitled to financial compensation to the extent of 100% of the sum insured.

Permanent Partial Disability: On the other hand, if the resultant disability is partial, other parameters being similar to total disability, the financial compensation will range from 5 to 70% of the sum insured depending on the affected part of the body. If the partial disability affects more than one part, then the compensation will be equivalent or 100% of the sum insured.

Temporary Total Disability: In such cases when it is conclusively determined that the affliction is caused solely by the accident, the policy caters for a weekly compensation to the extent of 1% of the sum insured subject to a maximum cap, which is some plans are to the tune of Rs.50000. It is further required to be supported by a certificate from medical professional stating loss of occupation for a specified period which can extend up to 100 weeks.

Transportation of Mortal Remains: Accidental death during the policy term entitles the transportation of the deceased from the site of the accident to the cremation or burial ground limited to a percentage of the sum insured and a maximum cap.

Children’s Education Cover: In the event of death or permanent total disability, up to two of your dependent children will be compensated with one-time financial payment as defined in the policy terms.

With additional payment of premium, there are a host of other benefits that goes a long way in extending financial protection for suffering an accident.

Hospitalization Cover: The treatment of the injuries requiring hospitalization entitles you to reasonable medical expenses incurred by you.

Daily Hospital Allowance: This cover entitles you to a daily cash allowance of fixed sum with a maximum cap of the amount as well as the number of days of confinement.

Reimbursement of Medical Expenses: Treatment from a medical practitioner for injuries caused in an accident during the policy period is reimbursed subject to caps and other regulations defined in the policy document.

Exclusions in Personal Accident Insurance:

It is imperative to scan the policy document thoroughly to determine if there are any clauses other than the customary in the list of exclusions as under:

Natural Death.

Death due to war and nuclear hazards.

Death due to disease or HIV.

Suicide or self-inflicted causes.

Drug Abuse.

Bottom Line:

It is a fact of life that the incidence of accidental death has seen an exponential rise over the years. What better than procuring comprehensive insurance of Personal Accident policy to extend a financial safety net for your family and dependents? It is a low premium policy with a host of benefits other than providing ease of purchase and a hassle-free claim process.

 

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