Accidents are unpredictable. It may happen to anyone at any point of time. Though you have taken proper care and precautions, they just happen if they have to. Now-a-days the probability of accidents are rising in alarming numbers. This is because of ever-rising number of personal vehicles, poor Public transportation, poor traffic awareness, poor infrastructure etc. There are physical as well as financial consequences of accidents. While injuries can incapacitate you temporarily or permanently, they can even drain your lifetime savings, leaving your family in a difficult situation without resources or help. Hence, securing your family’s future and enabling their basic day-to-day needs in absence of income becomes utmost priority for you. Every one should know about Personal Accident Insurance policy and the coverage of the policy to meet all your After-accident-consequences.
What is Personal Accident Insurance Policy?
A PA insurance policy is a plan which provides monetary compensation in the event of bodily injuries or disability or death caused solely by violent, accidental, visible and external events. Personal accident schemes cover the policyholder against death or disability due to an accident.
Why We need Personal Accident Insurance?
Many of us having doubt that they have Term Policy and Health Insurance policies along with a rider of Personal Accident Insurance. Then why they need stand-alone Personal Accident Insurance policy? Most of the Term insurance plans or Health Insurance Policies do not provide Personal Accident insurance benefits. Some life insurance companies provide Personal accident death benefits as riders but do not provide risk cover for disability (Permanent or temporary) arising out of an accident. These optional riders are not as comprehensive as stand-alone Personal Accident Insurance Policies. Hence, it is very much required to have a Personal Accident Insurance along with Term Policy and Health Insurance policy.
A live example Illustrates the importance of Personal Accident Insurance Policy:
One of my friend who is working in a famous Software company used to travel by bike to commute to office. He will not prefer Public Transportation because it is not possible to reach office in-time. He is having Term policy as well as Health Insurance policy. But he doesn't have Personal Accident Insurance policy. One unfortunate day, while he is back to home in the late night, he met with an accident because of the rash driving of a car and slammed into his bike. It was a serious incident and what he never imagined happened! Both of his hands were non functional after this accident. Being a software engineer, he knew the importance of hands and that his future is almost lost. This one incident changed him life . While his income stopped, his expenses at house , EMI etc had to still continue. His term plan could not pay him because he was not dead . His health insurance plan covered the expenses for hospitalization, but only covered for a basic amount in case there was a temporary disablement . But his case was not covered in any of his existing insurance policies . At this point of time, if he had a Personal Accident Insurance Policy, it might have helped him a lot.
Why Personal Accident Insurance is Not Popular?
Now-a-days Term Policies and Health Insurance policies are popular and many youngsters are getting awareness about these policies. Even Private Insurance companies are providing huge advertisements through their agents and giving awareness among the public. However, the Personal Accident Policies are not that much popular. Very few know about these policies. Why? It is because of the agents of the Insurance provider companies. The Agents may earn barely Rs 50 - Rs 100 as commission from selling such a policy. So, we should have some awareness about these low-priced but high-worthy policy.
Coverage of Personal Accident Insurance Policy:
Accidental Death: It indicates death of the policyholder in an accident. The Sum Assured under this plan is payable if death occurs from an accident. However, the death needs to occur within specified timelines of the accident for the claim to be payable, usually taken as 15 days. In that case, if death occurs after 15 days of the accident, then the claim may not be payable as the reason for death could be any other than accident also.
Permanent total disablement: If the physical injuries due to an accident results in permanent disablement, then up to 100 per cent of the policy sum insured is payable to the insured
Broken bones: If the physical injuries to the insured results in bone fractures, then up to 10 per cent of policy sum insured is payable under the policy
Hospital cash (illness & accident): In the event of insured’s accident or illness, a daily assistance for hospitalization up to 45 days is provided
Burns: If an accident results in hospitalization of the insured and treatment of burns, up to 5 per cent of policy sum insured is payable
Key Features of Personal Accident Insurance:
Anyone below the age of 65 years is eligible for the coverage under a regular PA insurance policy.
Sum insured typically ranges from Rs 2.5 lakh to Rs 15 lakh in policies offered by Indian insurers.
They offer a comprehensive coverage at affordable price, which is also extendable to the entire family in a single policy including dependents -- parents and children.
Most PA insurance policies come with no boundary limits -- they offer coverage for accidents in India as well as outside of India (of course, with some restrictions).
Coverage on ambulance expenses as well as daily cash reimbursements for hospitalization due to accidents and sickness are also included in the most PA insurance plans.
Additional Benefits of Personal Accident Insurance Policy:
With a number of private players entering the insurance space, a lot of innovative benefits are now offered under this cover along with the traditional cover. Here are some of the extra benefits that are provided by many general insurers:
Education benefit: The policy will bear the education cost of maximum two dependent children, up to the age of 23, subject to limits.
Employment benefits: The policy provides financial compensation up to a specified limit in the event of loss of employment of the insured following an accident resulting in loss of limbs/eyes or permanent total disability.
Ambulance benefits: If the insured has used an ambulance to reach a hospital, the policy will pay the necessary charges up to a specified limit.
Funeral expenses: In case of accidental death, funeral expenses can also be covered
Hospital / Daily cash benefits: The policy provides payment of a fixed allowance on a daily basis on hospitalization in India for accidental bodily injury, if the hospitalization exceeds a specified number of days. The rate of allowance and the minimum period of hospitalization qualifying for payment of this allowance would depend on the plan.
Miscellaneous Expenses: The policy also covers expenses for transportation of dead body, reimbursement of medical expenses incurred for treatment following an accident, cost of supporting items used like crutches, wheelchair, artificial limbs are also reimbursed.
Some Key Factors You Should Consider Before Purchasing Personal Accident Insurance Policy:
Plan Basis : Plans can be either in individual or family floater option. While an individual plan works best for bachelors and spinsters, a family floater option will be ideal and economical when one has at least 4 or more members in the family and he/she is the primary earner.
Age Limits : Entry ages are key to having a good insurance plan because contingencies relating to life and health can come at any time. Most plans do not have a cover ceasing age though there might be maximum entry ages. The more extensive the range of entry ages, the better a plan is.
Sum Assured : Most accident insurance plans come with a cap of sum assured of up to INR 1 crore or more and have a minimum sum assured too, ranging from INR 2 lakhs and more. Based on the profession one is in, a higher sum assured is always preferable.
Accidental Death Benefit : This is the value of the Sum assured and additional bonuses. The more the bonuses, the better the plan.
Disability Factors : Plans can cover permanent or temporary disability that is total or partial. Having the maximum number of options available always helps.
Medical Expenses and Ambulance Charges : In cases of accidents, immediate healthcare is always required and that too, at the nearest possible location. Ambulance charges might be required when push comes to shove. Covering both of these aspects is a sign of a good insurance plan.
Bonuses : Some plans might offer bonuses for dependent kids in the case of an accident. That is especially helpful if the treatment period is stretched long or the policyholder passes away.
Best Personal Accident Insurance Plans from Health Insurance Companies:
Life is full of uncertainties and one never knows how and where an accident may take place causing a bodily injury that may have financial implications. Hence every one should know the importance of having a Personal Accident Insurance Policy along with the existing Term Policy and Health Insurance Policy.
Have a Safe Ride!