The question, “What is personal accident insurance?” is a common question among individuals seeking a financial safety net, particularly in today’s uncertain world where accidents can happen unprecedentedly.
Personal accident insurance is an insurance coverage option that offers financial protection to the insured and their family in the event of an accident resulting in permanent total or partial disability or death.
Here is a blog that delves into the definition of personal accident insurance and its coverage features and benefits.
Personal Accident Insurance Meaning
Personal Accident Insurance is an insurance agreement between the two parties, the insured (policyholder) and the insurer (or the insurance provider)-wherein the insurer promises to give the insured or his family financial compensation in the event of death or permanent total or partial disability caused solely and directly from an accident by any external, violent and visible means.Personal accident insurance is available as a standalone plan and often as a bundled policy with other insurance plans, such as car insurance and home insurance.
Accident Insurance vs Health Insurance
A health insurance policy provides financial support for a wide range of unexpected medical expenses, including hospitalisation, daycare procedures and surgical treatments.
Personal accident insurance is a type of insurance policy that specifically extends financial assistance to help the insured sustain a livelihood, such as paying for rent, groceries, etc., in the event of their inability to work due to an accident. Although it reimburses for medical expenses, it is targeted towards compensating for the loss of income due to accidental death or disability.
Financial compensation offered under personal accident insurance will vary depending on the extent and severity of the disability, the sum insured, and the specific terms and conditions outlined in the policy.
Also Read:
Accident Insurance vs. Health Insurance
What Does Personal Accident Insurance Cover?
Having discussed the PA cover in insurance meaning, let us delve into what is covered under a personal accident insurance policy.
a. Accidental Death
If an accident results in the death of the insured person, the insurer will pay the entire sum insured to the nominee as declared in the policy document. The lump sum can be used by family members to reduce the financial burden in the policyholder's absence.
b. Accidental Permanent Total Disability
If an accident causes a permanent total disability, the policyholder will receive a benefit equal to 200%of the base sum insured and the earned cumulative bonuses, subject to the policy terms and conditions.At Reliance General Insurance, we offer personal accident insurance with the following coverage benefits for permanent total disability.
Loss of sight in both eyes
Loss of use or physical separation of both feet and hands
Loss of use or physical separation of one hand and one foot
Loss of sight of one eye and loss of use or physical separation of hand or foot
An injury resulting in permanent disablement and subsequent loss of employment
c. Accidental Permanent Partial Disability
In case of permanent partial disability caused by an accident, the policyholder will receive a specified percentage of the sum insured, as decided during the policy inception and as mentioned in the policy document.
d. Medical Expenses
Under personal accident insurance, the policyholder can be reimbursed for medical expenses and hospitalisation bills as applicable. The coverage can be extended to cover medical expenses at an additional premium.
Why do you Need Personal Accident Insurance
Now that we know what is a personal accident cover, let us closely examine its importance overall in an individual’s life.
a.Financial Stability
A personal accident insurance policy ensures financial stability in the event of accidental death or accidental permanent total and partial disability.
The financial compensation will help the family manage the financial inconsistency in the event of the policyholder’s death to maintain their standard of living.
In cases of disability, the policyholder benefits from the financial support to pay for their medical and other routine expenses, ensuring they can continue to meet their daily needs and focus on their quick recovery.
b. Replacement for Loss of Income
Accidents that lead to death or permanent total or partial disability result in a sudden loss of income. This can affect a family in different ways. The benefit received from the permanent accident insurance can be used to replace the loss of income.
Comprehensive Coverage
With a personal accident insurance policy, you can get coverage for all possible accident-related scenarios, including accidental death and permanent total and partial disability. It ensures financial protection for the policyholder and their family, no matter the severity of the accident.
Benefits of Personal Accident Insurance
In addition to the basic coverage, our
Personal Accident Insurance policy offers the following benefits.
a. Substantial Coverage at an Affordable Premium
Policyholders can get covered against accidental death or disabilities for a substantial sum insured at an affordable premium. It is a cost-effective option for comprehensive coverage.
b.Hassle-free Online Processes
We have streamlined the processes to extend a convenient and hassle-free option to purchase or renew personal accident insurance.
The user-friendly platform makes it easy and less time-consuming, with zero paperwork needed to manage personal accident insurance policies from anywhere.
c. Child Education Benefit
In the event of accidental death or permanent total or partial disability, the coverage offered can be used to pay for the education expenses of the dependent children. It ensures the children’s education is not disrupted due to financial hardships.
d. Carriage of Mortal Remains
In the event of an accidental death of the policyholder outside the residence, a lump sum amount, subject to the policy conditions, will be provided to the family for transportation.
e. Consistent Support
We have a dedicated team that can help policyholders clarify their doubts regarding personal accident insurance over the phone or online chat. They can also guide you through the process and resolve any issues.
f.Cumulative Bonus
For every claim-free year(completed and continuous policy year), the policyholders can benefit from a 5% increase in the capital sum insured, subject to a maximum of 50%.
Does Age Influence the Premium for a Personal Accident Insurance Policy?
While age is certainly a crucial factor for health insurance plans, it is not a major factor in the case of personal accident insurance. Therefore, the premium does not vary drastically across different age groups.
However, applicants will be asked to provide details of their occupation during policy inception. Individuals involved in high-risk occupations need to pay a higher premium than others.
Policyholders can also renew their personal accident insurance as per their requirements, even after an accidental disability. At the time of renewing personal accident insurance, they can use our
health insurance calculator to determine the premium and make a wise decision.
Wrapping Up
Personal accident insurance is an insurance plan that extends a financial safety net against unexpected accidents, ensuring financial protection in the event of a death or permanent total or partial disability.This insurance coverage primarily compensates for the loss of income during the most challenging times of a policyholder’s life, in addition to addressing concerns over medical expenses. It helps policyholders maintain their standard of living and secure their family’s future.As the coverage benefits, inclusions and exclusions are specific to the policy, as a thumb rule, make it a point to read and understand the terms & conditions mentioned in the policy document before you buy your personal accident insurance policy.
Frequently Asked Questions
What does “personal accident” mean?
Personal accident refers to an unforeseen and unintentional event caused to you by an external, violent and visible means. Personal accident insurance provides benefits for accidental deaths or disabilities caused to you rather than third parties.
Is it worth getting personal accident coverage?
Personal accident cover is certainly important as it extends financial protection to you and your family in the event of an accidental death or disability. It offers peace of mind while you are travelling or at work, knowing that you and your family are financially secure during unexpected scenarios.
What is not covered in personal accident insurance?
The inclusions and exclusions are specific to the policy and detailed in the policy document. Therefore, it is always important to read through the policy terms and conditions before purchasing the policy. Some of the common exclusions are:
a. Natural deathb. Death due to HIV/AIDS or any diseasec. Death due to attempted suicided. Death due to pregnancy or stillbirthe. Death due to radioactivity or ionising radiationf. Death due to wars and nuclear perilsg. Compensation exceeding the sum insured
