Personal accident insurance includes death cases caused by accidents, whereas term plan insurance covers death due to accident or natural reasons. A term plan covers only death benefits; on the other hand, personal accident insurance covers disabilities due to accidents along with medical expenses. To understand which type of insurance and how much coverage is needed, an individual need to analyse several factors, like determining one’s own assets, monthly income, expenses, debt obligations, lifestyle, etc. Both of them may look similar, but there are some differences which should not be ignored. In this article, we will be discussing Personal Accident Insurance. Let us first know what exactly Personal Accident insurance is.
What is Personal Accident Insurance?
Personal Accidental Insurance is meant to provide financial protection to the policyholder against some unfortunate events like accidental death, body injuries due to an accident, total or partial disabilities, and permanent or temporary disabilities arising out of an accident. In the event of the unfortunate death of the policyholder due to an accident, his/ her nominee will receive 100% compensation from the insurance company. It includes compensation to be paid in case of accidents that occur while travelling through road, air, rail, or any collision.
Benefits of Buying a Personal Accident Insurance
Provided below are the benefits of buying personal accident insurance:
- Financial Security
It offers financial security for the family members in the event of accidental death.
- No Medical Tests Required
No medical tests are required when the policy is purchased.
- No Waiting period
There is no waiting period, which allows policyholders to claim accidental injuries.
- Affordable Premiums
The policyholder can get a substantial amount of coverage at a reasonable premium.
- Worldwide coverage
It provides coverage against accidents all across the world.
- Cumulative Bonus
A cumulative bolus is offered if the insured forgets to file a claim in the previous year.
- 24*7 Customer support
Get 24*7 assistance round the clock.
- Tax Benefits
Get income tax deductions u/s 80D of the Income Tax Act, 1961.
Inclusions
Provided below is the list of items included in the Personal Accident Insurance:
- Accidental Death
The nominee of the insured will get the amount of the sum assured in case of accidental death of the policyholder.
- Permanent Total Disability
If the accident leads to a permanent total disability, the policyholder is provided a specified amount of the sum assured.
- Permanent Partial Disability
If the accident results in a disability, i.e. permanent and partial, the policyholder is provided a specified percentage of the amount.
- Temporary Total Disability
If an accident results in temporary total disability that makes the policyholder bedridden, he/ she will receive a weekly allowance as compensation towards loss of income.
- Loss of Income
If a policyholder has to leave his/ her job due to an accident, a fixed amount of income would be received for the income lost.
- Education of children
The sum assured can also be used to educate the children in case of the sudden demise of a policyholder.
- Loan Protection
This includes repayment of debts and obligations of policyholders in case of death or disabilities due to an accident.
- Transportation of Mortal Remains
In case of the death of a policyholder resulting from an accident, the nominee will receive the amount of expenditure incurred on the transportation of his mortal remains.
- Cremation Expenses
It covers the expenses related to the policyholder’s funeral ceremony.
- Broken Bones Benefits
Compensation would be received in case of fractured bones due to an accident.
- Accidental Hospitalization Expenses
The insured will receive the medical expenses incurred during the hospital stay as a result of an accident.
- Life Support Benefits
The policyholder’s medical expenses incurred while using life support by the policyholder during hospitalisation due to the accident are also covered.
- Ambulance Expenses
The ambulance charges are also included.
- Family Transportation Allowance
The transportation expense incurred to reach the hospital out of the city where the policyholder is admitted is also covered.
- Home Alteration
In case of permanent total disability occurring due to an accident, the policyholder will receive the expenses incurred on home modification or vehicle repair.
Exclusions
Provided below is the list of items excluded from the Personal Accident Insurance:
- Natural Death
- Suicides, i.e. self-injury
- Intoxicating Drugs or Liquor
- Accidental Injury
- Childbirth
- Pregnancy
- AIDS
- Mental disorders
- Breach of law by performing criminal offence
- Terrorism
- War
- Air Force, naval, or military activities
Types of Personal Accidental Insurance
Provided below are two types of personal accidental insurance:
- Individual Accidental Insurance
This type covers only one person, where the insurer provides coverage in case of a death or disability as a result of an accident.
- Group Accidental Insurance
This insurance is offered to a group of employees, such as workers and members of an organisation.
Documents Required
Provided is the list of documents required to be filed in case of an accidental death:
- Death Certificate
- FIR Report
- Medical Certificate
- Post-Mortem Report
- Medicine Bills
- Any other report, as requested by the insurer
Conclusion
Personal accident insurance provides financial assistance, including medical expenses or any other miscellaneous expenses. One can sit back and focus on the treatment or recovery process, leaving behind the financial stress. Determining the right amount of coverage depends on multiple factors, like requirements, replacement of income, lifestyle, medical expenses, etc. It is advisable to have a high amount of coverage, normally 5-10 times the annual income. It will cover all the unforeseen expenses, allowing mental peace, financial stability, and a sense of security to the dependents.
