The total number of road accidents in India are rising year after year. According to a report from the Indian Ministry of Road Transport & Highways (1), the total number of road accidents has increased by 2.5% from 4,89,400 in 2014 to 5,01,423 in 2015.
If death occurs due to an accident, a life insurance can cover the insured’s dependents from economic repercussions of the mishap. But what if the accident causes temporary or permanent disability that does not allow the continuation of the job? And how about the hospitalization expenses and livelihood? This gap in the insurance portfolio could be filled in by a personal accident policy! Read through this ArthaYantra post to learn more.
What Is A Personal Accident Insurance Policy?
A personal accident insurance policy covers the insured against disability or death due to an accident. All general insurance companies offer these policies. A claim can be made by submitting the doctor’s certificate for the disability, citing the percentage of disability. If approved, the cover offers financial support to the policyholder for disability following an accident.
What Are Covered In A Personal Accident Insurance?
An ideal personal accident insurance should financially cover the insured against accidental disability, death, besides taking care of monetary expenses during hospitalization.
The basic policy only covers death and permanent disability. Only with enhanced protection, more cover against partial or temporary disability following an accident is allowed. An enhanced policy may even cover minor accidents, irrespective of the magnitude of the mishap, like falling off a bicycle and fracturing a leg, breaking an arm, etc.
However, each plan comes with different conditions. The disabilities and features generally covered across policies include:
- Accident Temporary Disability: Severe injuries causing temporary disability like broken bones.
- Accidental Dismemberment: Loss of one or more limbs due to accident or one or more body parts being dismembered.
- Accident Death: Loss of insured’s life in the accident. The total assured sum would be given to the insured’s nominees.
- Medical Reimbursement For Health Treatments Following Accident: Reimbursement can be claimed against the treatment for complications like mental trauma, etc. after the accident.
- Terrorism Act: Injuries afflicted as a result of terrorist acts can also be covered.
- Daily Allowance Throughout Hospitalization: It offers financial support to a patient while he or she undergoes treatment at the hospital.
Other benefits of personal accident policies include child education support, loan protector, ambulance hiring charges, legal bail expenses, indemnity, etc.
Things to Consider Before Opting For A Personal Accident Cover
It is important to understand the terms and conditions before buying any policy. In one case, a policyholder lost his index finger in a car accident and received a certificate of 15% disability from the hospital. Yet, his claim was rejected by the insurance company, as his policy only covered total disability.
Ask the insurer or its representative to clearly explain the exclusions in the offered policy. If the policy covers permanent total disability, which is defined as total eyesight loss in both eyes, dismemberment or total loss of use of both legs or hands, or one leg and one hand, the loss of one eye can’t be covered by the company. In this case, even though one eye is a lost permanently, it does not fall under total disability.
In conclusion, a personal accident policy is beneficial for individuals who travel excessively and are more prone to accidents. However, an accident could hit anyone at any time, even if he or she is not an extensive traveler. The personal accident policy helps the insured avoid economic distress following an accident.
Get your insurance portfolio in place, after evaluating the types of insurance policies, and avoid draining your bank account at the time of financial distress. Get expert advice from ArthaYantra, world’s only full-service Robo-advisor, and create a personalized financial plan to deal with any money demanding situations of life. Stay covered and stay secure!