Introduction

You probably would have a life insurance policy to protect the financial needs of your family after your death and a medical insurance policy to act as a cushion and take care of your emergency hospitalization expenses.

But do you have personal accident insurance? Unlike other popular insurance plans, not many people are aware of personal accident insurance. Here, in this guide, you can find all that you need to know about personal accident insurance – what it is, features, benefits, which insurer and policy to choose, FAQs and much more.

What is personal accident insurance?

As the name indicates, personal accident insurance schemes protect the policyholder against disability or death due to an accident. Most general insurance companies offer personal accident insurance. However, these low-priced policies often take a backseat to other popular insurance schemes.

In life, we never know what will happen the next minute. An accident can occur anywhere – at your workspace, at home, on the road or anywhere else. It could lead to injury, disabilities and even death. When you suffer an accident, it not only affects you but also could cause a severe financial crisis for your family members.

This is where - personal accident insurance comes into the picture. This insurance scheme offers you financial coverage, in the unfortunate case of an accident. Personal accident insurance plans offer coverage against disablement (temporary/partial/permanent) and death due to an accident.

You can choose personal accident insurance as a separate stand-alone insurance plan or opt for it as an add-on cover to your other insurance policies like term insurance, health insurance, and more.

The personal accident insurance plan offers you complete financial protection against uncertainties in life due to an accident. Accidental bodily injuries, temporary/permanent/total disability, accidental death are all covered under the plan.

Benefits Offered by Personal Accident Insurance Plans

Standard Benefits – These are the benefits offered by all personal accident insurance plans.

Accidental death benefit

This is the main benefit; in fact, the primary reason for purchasing personal accident cover. If the policyholder dies due to an accident during the policy coverage term, then the insurer is liable to pay the nominee 100% of the sum assured, as per the policy terms.

Permanent total disability benefit

A permanent, irreversible disability is an injury incurred by the policyholder, preventing him/her from going back to their normal routine. Generally, all disabilities that have a time frame of over 12 months with no positive signs of improvement are considered as a permanent irreversible disability.

If the policyholder is permanently disabled, the insurer pays the sum assured to the beneficiary, as per the terms and conditions of the plan.

What constitutes a permanent total disability?

• Loss of vision in both eyes
• Complete loss of both hands or feet
• Loss of one hand and one foot
• Loss of vision in one eye and loss of one hand or foot
• Complete loss of speech
• Complete loss of hearing in both ears
• Complete loss of one limb and hearing in both ears
• Complete loss of vision in one eye and hearing in both ears
• Complete loss of speech and loss of anyone limb
• Complete loss of speech and vision in one eye

*Refer your policy document for a complete list of included permanent disabilities mentioned by your insurer.

Permanent partial disability benefit

These are disabilities that interrupt the normal living of the insured. Loss of eyesight, loss of speech, and loss of limbs are some conditions that are considered as a permanent partial disability. In such cases, the insurer pays the policyholder a percentage of the sum insured, as per the terms and conditions of the plan.

What constitutes a permanent partial disability?

• Loss of an arm at the shoulder joint
• Loss of an arm above/below the elbow joint
• Loss of a hand at the wrist
• Loss of a thumb/index finger/any other finger
• Loss of a leg above the mid-thigh
• Loss of a leg up to the mid-thigh
• Loss of a leg below the knee
• Loss of a leg up to the mid-calf
• Loss of a foot
• Loss of the large toe/any other toe
• Loss of vision in one eye
• Loss of hearing in one ear
• Loss of the sense of taste/smell

*Refer your policy document for a complete list of included permanent partial disabilities mentioned by your insurer and the percentage of sum assured for each disability.

Temporary total disability benefit

These are injuries that last for over a year, preventing the insured from carrying out their regular day-to-day activities, while also leading to a loss of income. In such cases, insurers provide daily or weekly allowance to the insured. The compensation amount is determined on a case by case basis, based on the severity of the condition.

Additional Benefits – These are benefits offered by a few insurers as an incentive to policyholders to choose their plan, over plans offered by others. Sometimes, you can get these additional benefits by paying an extra premium.

Hospital confinement allowance

Sometimes an accident may require the insured to be admitted in the hospital for a prolonged period of time. In such cases, the insurer pays a daily allowance to the insured for the period of hospital stay. Some insurers offer a pre-fixed amount, while others alter the sum based on the severity of the condition.

Hospitalization cover

If the insured person faces an accident that requires hospitalization, then the insurer takes care of the hospital bills and other medical expenses. The insurer reimburses the customary, necessary, and usual hospital expenses.

Modification of vehicle or accommodation

Sometimes an accident may cause injuries that prevent the policyholder from carrying out their day-to-day tasks without any assistance. In such cases, the insured person may have to modify their vehicle or accommodation according to their disability. For instance, a person who has lost his/her legs may require balance wheels to be fitted in their two-wheeler and rails to be fitted at home. The insurer covers the cost of making these modifications under this benefit.

Transportation of mortal remains

Under this benefit, the insurer reimburses the cost of transporting the remains of the policyholder (who passed away in an accident) to the cremation ground. The amount paid depends on the conditions of your policy plan.

Children’s education benefit

When the policyholder makes a claim, the insurer also provides a one-time payment for each dependent child of the insured for the cost of education.

Education advantage

If this benefit is offered, the insurer pays the cost of present and future education expenses for the children of the insured, up to a specific limit, as a one-time lump sum payment.

Ambulance expenses

The insurer reimburses the cost of the ambulance charges for carrying the insured from the site of the accident to the hospital.

Broken bones

If the insured fractures a bone or suffers any other bone damage in an accident, the insurer pays a fixed compensation amount.

Burns

If the insured suffers from a burn injury in an accident, the insurer pays a fixed compensation amount.

Family transportation allowance

The insurer reimburses the amount spent by the family members for reaching the hospital/accident site of the insured.

Loan protector

If the insured passes away due to an accident or is permanently disabled, the insurer pays a lump sum amount to pay off the loans of the insured.

Key Features of Personal Accident Insurance Plan

1. Cover for Death – In the unfortunate case of the accidental death of the insured, the insurer pays 100% of the sum assured to the nominee(s).

2. Cover for Permanent Total Disability – In the unfortunate case of the insured getting permanently disabled due to an accident, the insurer pays 100% or part of the sum assured to the policyholder. The amount payable depends on the type of policy.

3. Cover for Permanent Partial Disability – In the unfortunate case of the insured suffering a permanent partial disability due to an accident, the insurer pays up to 100% of the sum assured to the policyholder. The amount payable depends on the type of policy.

4. Cover for Temporary Total Disability – Some personal accident insurance plans also offer weekly benefit to the insured, when they are home confined due to a temporary total disability, like fracture of both limbs, etc.

5. Cover for Hospitalization – If the insured requires hospitalization for treatment of injuries due to the accident, the insurer pays a percentage of the sum assured for hospitalization and other related medical expenses.

6. Cover for Transportation of Mortal Remains – If the insured passes away due to an accident, the plan reimburses the cost of transporting the mortal remains of the insured from the spot of the accident/hospital to the residence of the insured.

7. Cover for Ambulance Expenses – If the insured meets an accident, the insurer reimburses the ambulance expenses (including air ambulance) for transporting the insured from the spot of the accident to the nearest hospital.

8. Child Education Grant – If the insured passes away due to an accident or suffers from permanent total disability, the insurer pays education benefits for dependent children of the insured. The amount offered and the number of children covered depends on the type of plan.

9. Family Member Discount – When you take personal accident insurance cover for more than one member of your family, you can avail discounts on the premium. The percentage of discount varies from one insurer to another.

10. Increase in Coverage – If you renew the policy regularly without any breaks and if you don’t make any claims during a policy year, the insurer increases total disability coverage by 5% to a maximum of 25%.

Advantages of Personal Accident Insurance Plan

Imagine this situation – you are injured badly in a road accident and are permanently disabled. You can no longer continue in your regular job, which means your family loses a huge chunk of its monthly income. There are bills to pay, medical expenses due to your injury, loan EMIs, children’s education, and plenty of other expenditures to deal with.

This is why it’s essential to protect yourself and your family members with personal accident cover. Here are the major advantages of purchasing a personal accident insurance plan:

• Financial security for your family in case of emergencies
• Minimal paperwork
• Hassle-free claims
• Extensive coverage at low premiums
• Overseas coverage
• Coverage for all your family members
• No pre-application medical tests
• Lifelong renewability
• Child education benefit
• And more

Types of Personal Accident Insurance

Personal accident insurance plans can be broadly classified into two major categories:

1. Individual Accident Insurance Plan

As the name implies, these plans are available to individuals and protect them from any accidents. It includes several benefits like death benefits, disability benefit, dismemberment benefit, child education benefit, hospital allowance, and more depending on the terms and conditions of your plan.

In individual accidental insurance plans, you can choose the coverage required based on the premiums you can afford to pay. Generally, individual accident plans offer higher coverage, compared to the next category group accident plans.

2. Group Accident Insurance Plans

These are accident insurance plans availed by employers for the benefit of their employees. Since employers take multiple policies to offer coverage for all their employees, insurers are likely to provide a discount on premiums to the employers.

In some high-risk industries like factory floor work, construction, and so on, it is mandatory for employers to provide accidental insurance coverage to their employees. Additionally, accident insurance also acts as a good incentive to attract and retain talent.

With that said, the coverage offered by group accident insurance plans is minimal and not as high as that offered by individual insurance plans. Some employers pay the total premium cost out of their pocket, while others pay a part of it out of their pocket and deduct the rest from the employee salary.

10 Reasons to Buy Personal Accident Insurance

Nobody wants to get into an accident. But, then life is unpredictable, and we never know what will happen the next minute. While you cannot predict when or where an accident will occur, what you can do is get yourself prepared for it, if it happens.

When you purchase a personal accident insurance policy, it acts as a financial cushion protecting you in your hour of need. Here are the top 10 reasons why you should get personal accident insurance cover.

1. Death Benefit

This is the major reason why people purchase personal accident insurance plans. If the policyholder were to die in an accident, the insurer provides 100% of the sum assured to the beneficiary. This is the basic premise of personal accident insurance plans and helps the policyholder’s family move ahead in life.

While choosing the beneficiary of the policy, you have to appoint a Class I legal heir. This includes spouse, children – a son or daughter, mother and other members who are part of the Class I heirs.

2. Permanent Total Disability Benefit

An accident could lead to permanent disability and prevent the policyholder from earning a livelihood. Here, permanent disability refers to the loss of eyesight, loss of limbs, and so on. In the case of permanent, irreversible disability, the insurer provides 100% of the sum assured to the policyholder.

3. Permanent Partial Disability Benefit

Sometimes an accident does not cause death or permanent total disability. But the devastating effects of it remain similar. For instance, an accident could lead to other debilitating conditions like nerve damage, knee injury, loss of vision in one eye, etc.

In the case of the total, irrevocable partial disability, the insurer provides compensation to the policyholder helping him/her overcome this major setback.

4. Affordable Premiums

Personal accident insurance plans are one of the most affordable insurance schemes. For instance, if a 30-year-old healthy male were to take a personal accident cover for Rs. 10 lakhs, the annual premium would be lesser than Rs. 1000.

5. Choose as an Add-On Cover

Personal accident insurance can be purchased as an add-on cover to motor insurance, health insurance, or term insurance. Since it can be purchased as an add-on cover; you can avoid the hassles of purchasing it as a separate insurance policy.

6. Additional Benefits

Personal accident insurance offers additional benefits like an accidental emergency hospitalization, ambulance coverage, and more, for an added premium.

7. Lifelong Renewability

You can continue renewing the personal accident insurance policy as long as you need. There are no restrictions based on the age of the policyholder.

8. Offers Financial Security for your Family

The sum assured provided by the insurer protects your family’s finances during an emergency. Disability due to an accident disrupts the income flow of the family, as the employability of the policyholder gets affected, which leads to a financial crisis. The sum assured by the policy acts as a financial pillar, protecting your family from falling into a full-blown financial crisis.

9. Child Education Benefit

Some insurers offer coverage for the educational expenses of the children of the policyholder if the policyholder passes away or suffers a permanent disability, due to an accident. The insurer pays education grants to the children of the policyholder based on the terms and conditions of the policy document. This is one of the attractive ancillary benefits of the personal accident insurance policy.

10. Easy Claims Settlement

The claims settlement process of personal accident insurance is quite straightforward and is processed quickly, without any hassles. The person filing the claim has to provide a few basic details like – policy number, time and date of the accident, injury details, and so on. The insurer gets in touch with authorities to verify the details of the accident and starts the processing immediately.

Additionally, to apply for the policy, one does not have to go through medical tests, and the paperwork is minimal.

Coverage – Inclusions and Exclusions of Personal Accident Insurance

It’s essential that you know all that’s covered and not covered under your personal accident insurance plans, to avoid discrepancies during the time of filing a claim. While the actual list of inclusions and exclusions vary from policy to another, here’s a general list of the standard inclusions and exclusions of personal accident insurance.

Inclusions – What is covered under Personal Accident Insurance?

• Death of the insured due to an accident
• Partial or permanent disability like loss of sight, loss of hearing, nerve damage, etc.
• Dismemberment of limbs due to an accident
• Hospitalization charges and medical expenses incurred due to an accident
• Life support benefit
• Child education support
• Cost of ambulance
• Daily allowance

Exclusions – What is not covered under Personal Accident Insurance?

• Death due to illness, hospitalization or other natural means
• Pregnancy and childbirth-related ailments
• Death/injuries due to pre-existing disabilities and injuries
• Death/injuries due to self-injury or suicide
• Death/injuries due to drugs, alcohol and other intoxicants
• Nonallopathic treatments
• Death/injuries due to a criminal or illegal act
• Involvement in war activities
• Participating in military, air or naval force
• Participating in adventurous activities

Factors to Consider while Purchasing Personal Accident Insurance in India

An accident can happen anytime and anywhere. The uncertainty of the event makes it necessary to protect yourself from it. Personal accident insurance acts as a safety net protecting you from financial emergencies during an accident.

Today, several insurers offer a wide variety of accidental insurance. Choosing the right policy from all the available policies on the market is a huge challenge. Use this guide to learn about the factors that need to be considered while purchasing an accidental insurance plan in India, helping you make an informed decision.

1. Premium

The premium of the policy should be reasonably priced and fit your budget. The general rule is that with an increase in premium, the coverage increases, and vice versa. Look for a policy that strikes the right balance between coverage and premium.

For instance, choosing the policy with the lowest premium is not a smart move as it may not offer you sufficient coverage during an emergency.

While the premium is one of the key deciding factors, it shouldn’t be your sole deciding criteria. Make sure to consider the other factors mentioned below while choosing the ideal personal accident insurance plan that meet your requirements.

2. Plan Type

Once you have decided the premium you can afford, the next step is to figure out the type of plan. Do you want to choose a stand-alone personal accident insurance plan or opt for it as an add-on cover to your other insurance policies like health insurance and life insurance?

Additionally, another key factor to consider is whether you want to choose individual plans for all your family members or club everyone together under a single personal accident insurance plan. Family personal accident insurance plans offer coverage for the parents and dependent children under a single policy with a single premium.

3. Insurance Company

The next major factor to consider is the insurance provider. Several insurers in India offer personal accident insurance. Make sure to spend some time comparing and evaluating the different insurers in the market to choose the right one that works for you.

The factors to help you shortlist the right insurer are – reputation and trust of the insurance company, claims settlement ratio, claims efficiency, customer service, and more. Look for an insurer who has a high claim settlement ratio. Claims settlement ratio denotes the number of settled claims compared to the total number of claims filed. Higher is this number, the higher the chances of your claims getting approved.

Apart from the claims settlement ratio, you also have to consider claims turnaround time. This is the time taken for the insurer to settle claims. Lower the turnaround time, faster is the time taken for processing claims and disbursing the funds.

4. Coverage of the Policy – Inclusions and Exclusions

This is a crucial deciding factor. Look for personal accident insurance plans that offer adequate coverage. The plan you choose must offer you coverage for several contingencies like death due to accidents, disabilities, dismemberment, loss of ability, child education benefit, hospitalization expenses, and more.

Generally, all personal accident insurance plans offer coverage for death due to an accident. The other features are offered as additional coverage. Look for plans with extensive bonus coverage.

Apart from the inclusions, make sure to go through the policy exclusions to see what’s not included. Understanding the inclusions and exclusions gives you a clear picture of the overall coverage offered by the policy, and prevents disappointments later on.

5. Added Benefits

Apart from coverage, the benefits offered by the plan should be extensive. Some plans offer compensation for burns, broken bones, ambulance charges, and more.

6. Overseas Coverage

Some personal accident insurance plans also offer overseas coverage that protects the insured in case of an accident while travelling overseas. If you are a frequent traveler, then this feature will be of huge benefit to you.

7. Benefits to your Family Members

Some accident insurance plans offer extensive financial support to the family members of the insured. For instance, child education benefit ensures that your children’s education continues unhampered, even if you are injured in an accident. Look for plans that offer higher monetary benefits to family members, as this can help in reducing the financial burdens of your family, during an emergency.

8. Add-On Covers

Add on covers are optional features that you can avail by paying an extra premium. Add-on covers help to enhance the coverage offered by your basic plan. Different insurers offer different types of add-on covers.

While choosing add-on covers, make sure to choose only the ones that you will use. For instance, if you can afford to pay the ambulance charges out of your pocket, then you needn’t pay extra to get this coverage.

Some of the common add-on covers include hospitalization expenses, hospital daily allowance, ambulance allowance, broken bones and burns, and child education benefit.

While evaluating different accident insurance plans, make sure to choose plans that offer a higher number of add-on covers. This way, you can choose the add-on covers if needed later on.

9. Claim Settlement Process

All insurers require you to intimate them within 30 days of the accident. While filing a claim, you have to provide several supporting documents like a copy of the FIR, medical certificates, witness claims, and more.

Check if the insurer has an easy claim application process. Some insurers even offer online claim filing, thereby reducing the hassles of the process. While others require you to go through a TPA (Third Party Administrator) while filing claims. Having a TPA is an extra step, and most TPAs work to deduct the approved claim amount.

Hence, it’s crucial that you do a comprehensive research about the claims settlement process while choosing a personal accident insurance plan.

10. Waiting Period for Pre-Existing Diseases

If you have any pre-existing disease like diabetes, hypertension, etc., then your insurer is likely to impose a waiting period. You can submit any claims only after the end of this waiting period. So, make sure to consider the waiting periods mentioned by different insurers. Look for policies that offer minimal waiting period and quick coverage for pre-existing diseases.

With increasing medical costs and the inherent uncertainty of life, you must apply for a personal accident insurance plan. It acts as a back-up offering you financial protection from unforeseen circumstances.

On the outset, all personal accident insurance plans may appear similar. Make sure to spend some time researching the different plans on the market – compare the features, coverage, benefits, and more, and choose the right plan that works for you.

We highly recommend that you consider all these factors while deciding the right personal accident plan for you and your family.

Top 10 Personal Accident Insurance Plans in India for 2019

1. HDFC ERGO Personal Accident Insurance

The HDFC ERGO Personal Accident Plan helps you sail through accidents without any financial strains. This policy offers a single lump-sum compensation to cover for medical expenditures incurred due to an accident. Additionally, the plan also secures your family’s day-to-day finances when the policyholder passes away due to an accident.

Features:

• Lifelong renewability
• Worldwide coverage
• Option to cover family
• No medical checkups
• Entry age – 18 to 70 years

What’s included?

• Accidental death benefit – 100% of sum insured
• Permanent total disability, broken bones, burns
• Ambulance costs and hospital cash

2. SBI General Individual Personal Accident Insurance Policy

SBI General is the insurance wing of SBI, India’s largest public bank. This policy offers death benefits as well as disability benefits, along with several other allowances.

Features:

• Policy available to salaried, business and self-employed people
• Cumulative bonus available
• Minimum coverage is Rs. 1 lakh and maximum coverage is Rs. 1 crore.
• Sum insured for accidental death benefit is 120x the monthly gross income or annual gross earnings
• Entry age for adults 18 to 65 years and for children ages 3 to 23 years

What’s included?

• Death benefit and permanent total disability benefit
• Add on covers include ambulance charges and hospital confinement allowance
• Education benefit and adaptation allowance

3. Apollo Munich Individual Personal Accident Insurance

Apollo Munich offers two types of personal accident insurance plans.

i. Standard Plan

Features:

• Sum insured – Rs 1 lakh to Rs 50 lakhs
• Accidental death benefit, permanent total disability, partial total disability, family transportation, transportation of mortal remains, ambulance charges, education fund, and accidental medical expenses
• Entry age – 91 days to 69 years

ii. Premium Plan

Features:

• Sum insured – Rs 5 lakhs to Rs 5 crores
• Accidental death benefit, permanent total disability, partial total disability, family transportation, transportation of mortal remains, ambulance charges, education fund, accidental medical expenses, temporary total disability, broken bones, purchase of blood, transportation of imported medicines, modification of vehicle/residence.
• Entry age – 91 days to 69 years

4. Max Bupa Personal Accident Insurance Policy

One of the top health insurers in India, Max Bupa, offers a robust personal accident plan that offers all-round protection to the insured in an accident. Apart from the included benefits, policyholders can also choose various add-on covers to extend the coverage.

Features:

• Individual or family coverage
• Worldwide coverage
• Choose from 2 or 3-year tenure
• Cover ranges from Rs. 5 lakhs to Rs. 2 crores
• Entry age – 18 years to 65 years

What’s included?

• Death benefit
• Permanent total disability, permanent partial disability, child education benefit, funeral expenses
• Add-on covers temporary total disability, accidental hospitalization

5. Shriram General Personal Accident Insurance

Shriram General offers four different types of personal accident plans:

• The Basic Plan – Offers coverage for accidental death, transportation of mortal remains, and children’s education benefits.
• The Basic Plus Plan – Offers coverage for accidental death, children’s education benefits, and permanent total disability.
• The Advance Plan – Offers coverage for accidental death, children’s education benefits, permanent total disability, and permanent partial disability.
• The Comprehensive Plan – Offers coverage for accidental death, children’s education benefits, permanent total disability, permanent partial disability, and temporary total disability.

6. ICICI Lombard Personal Protect Policy

ICICI Lombard is one of the leading general insurance companies in India. The personal protect policy is the personal accident insurance plan from ICICI Lombard.

Key Features

• Choose from different coverage based on varying sum assured like Rs. 3 lakhs, Rs. 5 lakhs, Rs. 10 lakhs, Rs. 15 lakhs, Rs. 20 lakhs or Rs. 25 lakhs
• No prior medical check-up required
• Worldwide coverage
• Easy claim policy with minimal documentation
• Entry age 18 to 80 years

What’s included?

• Coverage for accidental death, permanent total disability.
• Add-on covers include accidental hospital daily allowance, accidental hospitalisation expenses

7. Star Health Personal Accident Care Insurance Policy

The personal accident insurance policy from Star Health protects you and your loved ones from a financial crisis during an emergency. It offers lump-sum compensation for death and disability due to an accident.

What’s included?

• Coverage for accidental death, permanent total/partial disability, and temporary disability.
• Educational grant for children, transportation of imported medicines, travel expenses for one relative

8. Religare General Personal Accident Insurance Policy

Religare General Personal Accident Insurance policy offers you extensive coverage during personal accidents. With easy claim settlements, hassle-free policy application, and minimal documentation, this is one of the most preferred personal accident plans in India.

Features:

What’s included?

• Accidental death, permanent total disability, permanent partial disability, fractures, burns, child education benefit, domestic road ambulance, and reconstructive surgery.
• Add-on covers accidental hospitalization expenses, permanent total disablement improvement, temporary total disability, common carrier mishap cover, mobility cover, disappearance, loyalty benefit, and repatriation of mortal remains.

9. Bajaj Allianz Personal Guard

Bajaj Allianz offers three types of coverage under its personal accident insurance plan – Basic, Wider, and Comprehensive.

Features:

• Compensation of up to 125% of the sum assured in case of permanent total disability
• Family discount of up to 10%
• Cumulative bonus ranging from minimum 10% to maximum 50%
• Quick claim settlement
• In-house health admin team

What’s included?

• Accidental death benefit, permanent total disability, accidental medical expenses, child education benefit, and hospital confinement allowance.

10. Future Generali Accident Suraksha

Accident Suraksha is a personal accident insurance plan from Future Generali. This plan offers some of the most extensive add-on covers in the market.

Features:

• Entry age
  1. Adults – 18 to 70 years, with renewability up to 70 years
  2. Children – 3 to 25 years
• Worldwide cover
• Family discount
• Portability
• Sum assured depends on gross monthly income
• No pre-medical check-up

What’s included?

• Death benefit, permanent total disability, permanent partial disability, temporary total disability.
• Add-on covers include child education support, accidental hospitalization, accidental hospital allowance, road ambulance cover, chauffeur plan benefit, broken bones, loan protector, adaptation allowance, life support benefit, air ambulance cover, adventure sports benefit, and family transportation allowance.

Who should buy personal accident insurance?

While it’s recommended that all adults take personal accident insurance, some people benefit the most from it.

Self-employed people, those who work in risky jobs and elders benefit the most from personal accident insurance cover. This is because self-employed people are not likely to have any company-sponsored insurance cover. This means if they meet with an accident, they not only have to pay the hospital bills out of their pocket but also have time off work to recover and recuperate. This causes loss of income for the family, and personal accident cover helps to tide this unfortunate financial situation.

Secondly, if you are engaged in a risky profession, then personal accident cover is quite handy. Different professions have varying levels of risk factors. Here’s how some of the common professions are classified according to their risk levels.

When can you skip personal accident insurance?

While it’s highly recommended that all individuals take a personal accident insurance cover, there are some specific situations where it makes the most sense to skip it. For instance, if you have adequate worker’s compensation provided by your employer, then you can skip investing in a personal accident insurance plan.

What’s the difference between personal accident insurance and life insurance?

When you take a pure term life insurance policy, you are signing a contract with the insurance provider. On regular payment of the premiums as per the policy, the insurer will provide your beneficiaries with a lump sum amount that is the death benefit. This benefit helps to support your family financially, in the unfortunate case of your death.

On the other hand, personal accident insurance or accidental insurance protects the policyholder in case of injuries or death due to an accident. When we say an accident, most people consider road accidents. But, there are several other accidents like fire accidents in the house, snake bites, workplace injuries, slips and falls, and more.

Unlike term life insurance which offers coverage on the death of the policyholder, accidental insurance protects the policyholder irrespective of whether he passes away or suffers disabilities and injuries due to an accident.

In accidental insurance, you can avail claims for accidental death, accidental partial or total disability, accidental dismemberment and more.

What’s common about life insurance and accidental insurance is that both provide financial support to the beneficiaries of the policyholder in case of death of the insured. This protects the policyholder’s family from falling into a financial crisis.

Though both policies offer death benefits, there is a significant difference. The reason for death differentiates both these policies. While life insurance offers coverage for all reasons for death including old age, illness, accidents (not including suicide or self-injury), accidental insurance offers death benefits only for death due to accidents.

Here’s a quick summary of the differences between both:

Which one to choose? Life Insurance Vs. Personal Accident Insurance

Both life insurance and personal accident insurance provides a huge help to your nominees and other family members, in dealing with an emergency crisis, if something unfortunate were to happen to you. These insurance policies provide your dependent family with a lump sum payment if something were to happen to the insured – the breadwinner of the family. These plans provide you with peace of mind, knowing that your family is protected, even if something bad were to happen to you.

Coming to the big question, how do you choose the right insurance product between these?

Here’s an example to help you decide the right insurance product that works for you. Consider the case of Rajesh, who is married, and is the father of two kids. He is the primary breadwinner of his family. He, unfortunately, meets with a road accident and loses one limb and requires hospitalization. His hospital bills amount to Rs. 5 lakhs.

His family is going through a tough time. Not only do they have to deal with his hospital bills, but they also suffer from loss of income, as Rajesh is the prime breadwinner. Due to his disability, Rajesh will have to look for other work, and may not return to work for a long time.

There are two possible scenarios in this situation.

Scenario 1 – Rajesh has taken only term insurance, and his employer offers him medical insurance worth up to Rs. 2 lakhs. He can use the cover offered by the medical insurance policy to pay off the hospital bills partly. The rest has to be borne by his family, as the term insurance policy does not offer any cover in this situation. His family’s savings are likely to be wiped away, and they are likely to have a tough time making ends meet.

Scenario 2 – Rajesh has taken a personal accident insurance policy for him. In this case, he is liable to receive 50%, 75% or even 100% of the sum assured based on the conditions of his policy. This amount is a huge lifesaver, as it can help his family meet his hospitalization expenses while providing them with financial stability, till they get back on their feet.

As you can see, personal accident insurance offers you immense support when life insurance does not help you out. Hence, it’s highly recommended that you choose personal accident insurance cover along with your life insurance cover, to enjoy maximum benefits and utmost coverage.

What’s the difference between a personal accident insurance plan and critical illness insurance?

While both these policies seem to overlap, there is a keen line of demarcation between the two.

Personal accident insurance plans pay you or your nominees with a lump sum when you are diagnosed with an accident.

Critical illness insurance plans, on the other hand, offer you a lump sum payment, when you are diagnosed with any one of the critical illnesses listed in the policy document.

Let’s take a look at the differences and similarities between the two products:

Personal Accident Insurance: Claims Procedure

It’s essential that you know all the details about the claim procedure so that you know what needs to be done during an emergency. Make sure to have the contact details of the claims team of your insurer stored somewhere accessible, so that you can quickly contact the corresponding team during an emergency.

Most insurers require you to file a claim within a specific number of days of the incident. Refer your policy document for more details about the claims procedure of your insurer. Here’s the gist of the general claims procedure for all personal accident insurance plans.

How to file a personal accident insurance claim?

To start the claims process, you have to contact the insurer within a specific time frame. Make sure to check the exact time allowed in your policy document. If an accident occurs, you need to get in touch with the claims department of the insurer, as quickly as possible.

Make sure to have the following details handy while contacting your insurer:

• Policy number
• Mobile number of the insured/nominee
• Date, time and location of the accident
• Name of the person injured
• Brief description of the accident
• Extent of injury/loss

Once you have provided these details, the claims team member will provide you with a claims reference number. You then have to download the claims form from the insurer’s website or get the claims form from a representative of the insurer. Fill up the details of the claims form and submit it with relevant documents to the claims department.

Here’s a list of the documents that you have to provide for different types of claims.

For Accident Injury Claims

• Duly filled claim form
• FIR (First Information Report) if the accident was reported to the local police department
• X-rays, pathology reports and other medical documents
• Statement of the attending physician

For Permanent Disability Claims

• All the above-mentioned documents, along with disability certificate notarized by an authorized surgeon or the local municipal hospital

For Temporary Disability Claims

• All the above-mentioned documents, along with disability certificate notarized by an authorized surgeon or the local municipal hospital and sick-leave certificate certified by the employer

For Emergency Medical Expenses due to an Accident

• Duly filled claim form
• Police FIR, if applicable
• X-ray report, pathology reports, and other medical documents
• Statement of the attending physician
• Diagnosis, prescribed line of treatment and doctor’s prescription
• Cash memos and other medical bills

For Hospital Cash Allowance

• Hospital cash claim form
• Diagnosis, prescribed line of treatment and doctor’s prescription
• Hospital discharge card
• Statement of the attending physician

For Accidental Death Claims

• Duly filled claim form
• FIR or panchnama
• Coroner’s report or post-mortem report
• Notarized death certificate
• For payment to the beneficiary – the beneficiary has to provide succession certificate or notarized affidavit

*Note that these are just general list of documents you have to provide. Your insurer may require you to submit additional documents depending on the claim and the nature of the accident. Additionally, the claims service representative from the insurance company may visit you at home or at the hospital, to collect further details.

Tax Benefits of Personal Accident Insurance

Personal accident insurance plans, unlike other insurance products like health insurance, term insurance does not offer any tax benefits. This means you cannot claim tax deductions for the premiums you pay.

However, you have to understand that the main motto of purchasing an insurance plan is not for tax benefits, but for protection against uncertainties in life.

FAQs: Personal Accident Insurance

1. I already have health insurance and life insurance. Why should I choose personal accident insurance?

All these insurance products are created to meet different requirements. Your term life insurance plan offers death benefits to your nominees when you pass away. A health insurance plan provides for your hospitalization and other medical expenses.

Personal accident insurance, on the other hand, protects you and your family from financial risks that occur when the insured meets with an unfortunate accident. It offers coverage for death as well as disability, providing you and your family members with financial backing, in case of unforeseen events.

2. Will personal accident cover provide coverage when I travel outside India?

It depends on the plan you choose. Some insurers offer coverage for accidents incurred by the insured when travelling overseas.

3. My wife is a homemaker who spends most of her time at home. Does she need personal accident insurance?

Accidents can happen to anyone at any time. It’s not that you have to be travelling on the road frequently to meet with an accident. There are plenty of situations where things could go wrong at home – gas leaks, trips and falls, electric shocks, natural calamities, the lists are endless.

We don’t mean to scare you, but we wish to remind you that personal accident insurance is a must for all, irrespective of their age, gender, or career choice.

4. What constitutes an accident?

For terms of insurance, an accident refers to any sudden unintended and unexpected external event that causes bodily injury, disability, or death.

5. What are the different types of accidents covered under personal accident insurance?

An accident covered under this policy includes unexpected events like:

• Road, rail or air accidents
• Injuries due to trips, falls, and collisions
• Injury due to gas leaks, burst cylinders
• Frostbite, dog bite, snake bite
• Burns, fractures, drowning accidents
• Poisoning, etc.

This list is just a general indicator of the various accidents covered under this plan. For a detailed list of the accidents covered refer to your policy document.

6. Can I appoint my minor child as the nominee of the policy?

Yes, you can. In this case, you have to appoint a guardian for the child.

7. Can I claim income tax deductions for premiums paid for personal accident insurance?

No. There are no tax deductions available for premiums paid for accident insurance.

8. What is the age limit for personal accident insurance?

The actual age limit will depend on the insurer and the type of plan you choose. Generally, most insurers provide personal accident insurance for people aged above 18 years and below 65 years. Additionally, you can continue renewing the policy lifelong, if you have not made any claims during the previous year.

9. If I die due to a heart attack, will my nominees receive death benefits?

No. Personal accident insurance offers death benefits, only when the insured passes away due to an external accident and not due to illnesses or natural deaths.

10. What documents do I have to submit while making a claim?

The actual list of required documents depends on your insurer. Here is a general list of documents that you may have to provide while filing a claim.

• Claim form filled in and signed
• Copy of your policy
• Death certificate (if applicable) duly notarized/attested by a gazetted officer
• Incident Report duly notarized/attested by a gazetted officer
• Court final order or police final charge sheet
• Inquest and/or spot panchnama
• Post mortem report
• Chemical analysis report, viscera analysis report, forensic science lab report
• Other case related documents like newspaper cutting, website links, copy of treatment papers
• If the claim amount is more than one lakh, you have to provide a copy of your pan card, residence proof, and related documents
• Cancelled cheque with NEFT mandate

Apart from these documents, you have to provide any other document required by your insurer to aid the investigation of the claim.

11. Do I need to undergo medical tests to apply for this policy?

There is no requirement for pre-medical tests for a personal accident insurance policy. However, you are required to disclose any pre-existing illnesses or disabilities in the proposal form.

12. If I don’t make a claim in a policy year, will I get a refund?

No, there are no refunds available, even if you don’t make any claims during the policy year.

13. Do I get any discount if I take a family accident insurance policy for all my family members?

It depends from one insurer to another. Get in touch with your preferred insurance company to find out if they offer any discounts.

14. How many family members can I include in the family accident insurance plan?

Generally, most insurers allow you to include your partner, along with two dependent children under the family plan.

15. How is the sum assured determined?

The sum assured depends on several factors like:

• The income of the insured
• Nature of job
• Age
• Period of insurance
• And other related conditions

Get in touch with your insurance agent, to get to know the exact factors that determine the sum assured you could avail.

16. From when does the policy start?

The policy commences once you have provided the required documents, paid the premium and the policy document is issued.

17. Can I cancel my policy midway?

Yes, you can. Get in touch with your insurer to know the cancellation procedure.

18. If I cancel my policy midway, can I get a refund of the paid premium?

Yes. Your insurer processes your cancellation request and refunds the premium, after deducting the applicable premium for the cover you enjoyed.

The refund of the premium is usually carried out according to the following table:

19. What happens if I lose my policy document?

It’s highly recommended that you keep your original policy document in a safe place. However, in the unfortunate case, if it is lost or damaged, you can get in touch with your insurer and request a copy of the original document. Some insurers provide this service for free, while others require you to pay a nominal amount.

20. Why should I choose CreditMantri to purchase personal accident insurance?

CreditMantri offers you various advantages. Our key benefits include:

• Expert advice and guidance at no extra cost – CreditMantri’s insurance advisors give you complete details on all the personal accident insurance plans available on the market, helping you choose the best one that fits your specific requirements.
• Complete assistance – From helping you identify the right plan that works for you to assist you in filling the proposal form, CreditMantri offers you assistance every step of the way.
• Minimal paperwork and hassle-free application – We ensure that you complete the entire process quickly, and without the need for extensive paperwork.