The Buyt Desk
Term cover is an essential cover but may not be enough. A personal accident cover adds an extra layer of security to your insurance. God forbid if a serious accident leads to severe or partial disability which could impact your earning capacity then a personal accident cover can help with such income loss.
Personal accident insurance covers what term insurance and health cover may not cover. Post-hospitalization expenses and cash allowance are helpful claims after the accident of the insured.
On September 4th, Businessman Cyrus Mistry died in a car crash. This accident has alerted the nation about the risks associated with road travel. It has shown how important is a personal accident (PA) insurance cover.
What is a Personal Accident Cover?
A personal accident policy covers the insured against both disability and death caused by an accident. Along with this it also provides financial help to the insured’s family members. During such a crucial time, this policy unburdens the dependents. The claim amount provided by an insurer is based on the impact of the accident. Payout is different for partial and permanent disabilities.
Three types of disabilities get compensation from a personal accident insurance policy –
Total and permanent disability – In which the insured is injured significantly, resulting in irreversible damage and hence cannot earn or live regularly
Partial and permanent disability – In which the insured suffers partial but irreversible damage and hence reducing their capacity to live a regular life
Total and temporary disability – In which the insured suffers physical damage and temporarily insured cannot lead a normal life
Why Do You Need A Personal Accident Cover?
In India, road accidents are increasing day by day. Also, accidents have moved beyond roads, and lives in places like construction sites, footpaths, etc., have become devastating. In current conditions, a personal accident cover is a must for all policyholders. The most practical way to ensure personal safety is to buy a personal accident cover as it safeguards finances in an unforeseen event of an accident.
What is covered under personal accident cover?
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Term insurance will not cover the disabilities caused to the insured due to an accident. Only a personal accident policy will cover the accidents of the insured. A personal accident policy provides coverage against accidents leading to disability (partial or complete), bodily injuries, and death.
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Though term insurance covers death, a claim cannot be made if the insured suffers a disability and cannot work. This crucial gap in coverage is filled by a personal accident policy.
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The personal accident policy covers total and permanent disability, partial and permanent disability, total and temporary disability, and death.
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On the demise of the insured, the nominee gets a lump sum amount. And some may also cover legal and funeral expenses.
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It covers hospitalization and post-hospitalization expenses.
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Few policies also offer a cash allowance for a fixed duration.
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Few policies also provide financial support to the insured’s dependents, for example – providing education benefits to the insured children as earning capacity of the insured may have reduced completely or partially after the accident.
What is Excluded Under Personal Accident Cover?
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No claim can be made in case of a suicide, natural death, death due to pre-existing disability, or death due to the influence of alcohol or drugs.
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There will be no payout when the law is broken.
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There will be no payout if the accident is the result of the insured’s negligence.
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There will be no payout if the accident injury occurred while participating in an adventure sport.
How does Personal Accident Insurance work?
The payout for the claim depends on the total sum insured and the impact of the accident. Thus, accidents resulting in death or permanent disability of the insured receive the entire payout. The personal accident cover can be purchased with add-ons like Hospital Cash Benefits, Ambulance Expense Cover, etc. These add-ons additionally supplement the personal accident cover with an extra safety net.
Who Should Buy a Personal Accident Cover?
Experts advise people doing jobs that have a high probability of accidents to buy personal accident cover. Also, it is advised for those below 50 years of age to buy personal accident cover as they could die suffering an accident than natural death.
How much Cover Should Be Purchased?
Purchasing an adequate sum insured is important when buying personal accident cover. Experts advise that the sum insured should be up to 100 times the monthly income of the insured. If the insured is a frequent international traveller, then buy a worldwide coverage benefit. Also, the sum insured should depend on the number of dependents and their needs
