Personal accident insurance provides financial protection in the event of an accident. In this blog, I will cover each aspect of personal accident insurance in detail.
What is Personal Accident Insurance?
Personal Accident Insurance provides financial protection in case of death, disability or injury from an accident. The policy is designed to cover medical expenses incurred due to an accident, loss of income and other related expenses.
Personal accident insurance covers the ambiguous zone that neither life nor health insurance covers.
Example: Mr Akash was driving home from the office, and a speeding bus rammed into his bike. Someone from the crowd helped him to reach the hospital. The accident resulted in a fracture in his leg, and the doctor told him to take bed rest till it healed completely. While discharged from the hospital, the doctor advised him to rest for at least six months.
He was covered under group health insurance provided by his employer and life insurance coverage of Rs. 50 lakhs. Since he was covered by group health insurance, the medical bill of Rs. 3 lakhs was settled cashless. However, an accident led to a loss of earnings for six months, and he had to dive into savings to manage expenses for the six months. This loss of earnings is neither covered by life insurance nor health insurance.
Personal Accident Insurance covers this grey area (loss of earnings due to an accident).
What Does Personal Accident Insurance Cover?
Personal Accident Insurance in India typically covers the following:
1. Accidental death: The policy provides a lump sum amount to the nominee in case of the policyholder’s accidental death.
2. Permanent total disability: The policy covers the policyholder’s financial loss in case of permanent total disability resulting from an accident.
3. Permanent partial disability: The policy provides a lump sum to the policyholder in case of permanent partial disability resulting from an accident.
4. Temporary total disability: The policy covers loss of income due to temporary total disability resulting from an accident.
5. Medical expenses: The policy covers medical expenses incurred due to accidental injuries. The coverage and benefits vary depending on the policy and insurance provider.
How do you Choose the Right Personal Accident Insurance Policy?
Here are some tips for choosing the right personal accident insurance policy:
1. Coverage: Check for an insurance policy that provides comprehensive coverage for accidental death and permanent and temporary disability. Some policies may also cover medical expenses incurred due to the accident.
2. Sum Insured: The sum insured should be adequate to cover your needs. Consider your lifestyle, occupation and other factors when choosing the sum insured.
3. Premium: Compare premiums and benefits from different insurance providers to choose the best policy.
4. Exclusions: Be aware of the exclusions in the policy. Ensure you understand the circumstances under which the policy will not provide coverage.
5. Claim Settlement Ratio: Check the claim settlement ratio of the insurance company before purchasing the policy. A higher claim settlement ratio indicates a better track record of settling claims.
6. Add-on covers: Some policies offer additional benefits, such as accidental hospitalisation coverage or ambulance charges. Consider adding these covers if they are relevant to your needs.
7. Renewal: Check the renewal terms of the policy. Look for policies that offer lifetime renewal to cover you for the long term.
8. Reputation of the insurer: Choose an insurer with a good reputation in the market. Research the company’s history and read customer reviews to ensure you choose a reliable insurer.
Considering the above tips, you can choose the right personal accident insurance policy that suits your needs and provides financial protection in the unfortunate event of an accident.
Final Words:
Personal accident insurance is an essential type of coverage that can provide peace of mind and financial protection in an accident. It is necessary to carefully read the policy documents to understand the coverage and exclusions before purchasing a personal accident insurance policy.