Accidents could happen anytime and they might have unforeseen repercussions like injuries or death. Both life insurance and health insurance might not cover such accidents because you might have just a simple plan in place. That is why you need a Personal Accident Policy.
Life and health insurance plans cover specific eventualities, and the coverage offered usually helps mitigate the negative financial effects of such eventualities on the policyholder’s family. While life insurance provides financial benefits to dependents or nominees of the policyholder after his/her death, health insurance acts as a cover for unforeseen medical expenses, especially hospitalisation expenses.
Even though you can choose to get personal accident coverage under a life or health plan as an add-on, it is better to go for an individual policy as the coverage is much higher.
What does a Personal Accident Policy cover?
A personal accident plan covers all those eventualities that can happen due to an accident. This includes accidental death, disability, burns or other injuries. Most personal accident insurance plans provide coverage for both accidental death and medical expenses incurred due to hospitalization after an accident. The disabilities caused due to loss of limbs or eye-sight are also covered. Note that most policies cover only total permanent disability and not the partial disability. Read the terms and conditions of the policy to understand what it covers. There are policies that offer daily cash allowance in case of hospitalization after an accident.
The best part of a personal accident policy is that in case an accident disables the policyholder in such a way that they can’t be gainfully employed, the full sum assured will be paid out. Most policies including the ICICI Personal Protect Policy and SBI Personal Accident Insurance Policy have such features.
There are policies that cover partial or temporary disability but the percentage of sum assured payable in such cases might be much lower. Note that there are also policies that provide coverage for the entire family under the same policy.
There are policies that offer for specific dangers that might be relevant for certain individuals. This might depend on the kind of risks that an individual might be exposed to on an everyday basis. Personal Accident Policies can be customised according to the needs of the individual. There are insurers that offer such plans.
Who can go for this plan?
Individuals aged between 18 years and 80 years can go for a personal accident policy. However, some insurers fix the maximum age limit for the policy at 65 years. The insurers don’t make distinctions between salaried and self-employed individuals for giving a personal accident policy.
What are the add-ons?
Some accident insurance covers come with add-ons such as education benefit and adaptation benefit. For example, the SBI Personal Accident Policy provides an education benefit of Rs 50,000 or 1% of the basic sum assured, in case of death and permanent total disability of the policyholder. You can choose to go for this add-on if you buy the policy.
What else do you need to know?
There are policies that give you cumulative bonuses in case there are no claims. Check for these before you choose a plan. Also, the maximum coverage could be anywhere between Rs 15 lakhs and Rs 1 crore. Your premium will depend on this. So, choose a plan that you can afford. In case you want a high sum assured, you might be asked for copies of your payslip. This is because the sum assured might be restricted to 10 times your annual income in case of accidental death or disability. Check for this clause when you are choosing a plan.
Personal accident policies come with a number of exclusions. The usual ones include intentional injury, injuries from war, injuries that happened under the influence of alcohol/drugs, injuries due to participation in protests/strikes and injuries from participating in unsafe sports.
Be sure to compare across policies so that you can get the best features for the lowest cost. Go for Personal Accident insurance as an add-on to your life or health plan only if your employer is already providing you with enough cover.