How Personal Accident Insurance Policy Works – Forbes Advisor INDIA | Business Insurance

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While many of you are already saving for a rainy day and/or have purchased life and health insurance, there are several other useful and specific insurance coverages that are just as important. One such policy is the personal accident insurance policy.

According to a report from the National Office of Criminal Records, in 2020 there were 3,68,828 traffic accidents reported, of which more than 50% were traffic accidents. Traffic accidents caused 3,36,248 injuries and 1,46,354 deaths.

The impact of an accident can sometimes be fatal, sometimes temporary in nature and sometimes permanent. Physical damage aside, it can also have a severe impact on your financial and emotional health. Injuries sustained during an accident can affect your ability to work and earn a living. In such a scenario, a personal accident insurance policy can come to your rescue and protect you and your family.

What does personal accident insurance mean?

Personal accident insurance provides you and your family with the necessary financial assistance in the event that an accident causes death, bodily injury or temporary or permanent total/partial disability. If the accident results in the death of the policy holder, then 100% compensation (equal to the sum insured) will be paid to the designated nominee.

In addition, depending on the insurer and policy you choose, there are several other benefits that a personal accident insurance coverage holder can accrue. These include:

  • Hospitalization, pre and post hospitalization coverage
  • Daily cash allowance up to 30 days
  • Coverage for loss of income for a certain period of time
  • Education benefits for your dependent children up to a certain age
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Types of Personal Accident Insurance

Personal accident insurance can be broadly classified into two categories: group accident insurance and individual accident insurance.

Collective Personal Accident Insurance: Generally, companies and business owners choose to purchase personal accident coverage for their employees. This is particularly the case in manufacturing or construction businesses where workers and employees are more exposed to the risk of accidents. Such coverage acts as a guarantee for employees that, in the event of an accident in the workplace, they will be financially covered.

Individual Personal Accident Insurance: As the name suggests, such an insurance policy will be taken out by an individual to protect themselves from the risk of accidental damage. As noted, it would cover accidental death, temporary or permanent disability, etc.

How personal accident insurance can help you

Many people tend to ignore purchasing personal accident insurance because they believe that their existing life, health, or auto insurance policy will come to their rescue in the event of an accident. However, it is important to note that these policies do not provide the same type of holistic coverage required at the time of an accident, as a personal accident insurance policy does. Let’s consider personal accident coverage versus a life insurance policy and a health insurance policy:

  • A personal accident insurance policy provides coverage for benefits for loss of life or disability in the event of an accident. This coverage is for temporary or permanent or partial disability, financial aid in the event of loss of income resulting from the accident, and even aid for the education of dependent children.
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A life insurance policy, on the other hand, will generally only provide a death benefit. However, it is important to remember that personal accident coverage is like a subset of a life insurance policy in that it covers a specific risk, namely accidents.

  • Another important thing to know is that while many health and life insurance policies may be geographically limited, personal accident policies have coverage worldwide. This means that while other policies may not offer compensation for accidents that occur outside of India, there is no such limitation with a personal accident policy.
  • While one can take accidental coverage as a rider or additional coverage to a life or health insurance policy, it is always better to purchase it as a stand-alone policy. The premium for a personal accident policy is determined primarily based on your occupation and not your age.

Things to know before deciding to take out personal accident insurance

As always, the amount of coverage should be in line with your current monthly income and the quality of life you enjoy. The extent of coverage and who it covers will determine your costs, and there are a variety of options available to shop online quickly and easily.

Should the insured event occur, you will generally need to notify the insurance company immediately and provide a set of documents including the completed claim form, death/disability certificate, post-mortem/medical report, copy of the FIR, medical certificate. , drug bills, discharge summary (if hospitalized), and investigation report.

As in most other insurance policies, you should be aware of the exclusions, that is, the events that will not be covered by your policy. In the case of a personal accident insurance policy, these typically include intentional injury or suicide, injuries arising from war, drugs or alcohol, participation in violent public disorder or labor disturbances, and adventure sports, and claims arising from past illnesses and pregnancy. /Issues related to the birth of the child.

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Bottom line

While insurance cannot directly help with the emotional and psychological trauma of an accident, it can help offset the financial burdens that an unexpected event can bring. Today, there are several different types of insurance policies and providers, accessible on your device, that can comprehensively meet your risk protection needs.