Accidents have become commonplace today. Whether it is a minor fracture or a significant burn injury, or a road accident, anyone involved can experience severe physical disabilities. It can be very costly to treat and recover when accidents do happen. Also, when permanent disability or death occurs, you lose the ability to work and lose income. Although health insurance policies cover medical expenses related to accidents, accidental deaths and disabilities are not covered. This is the situation that personal accident insurance was made for. Here is all you need to know about personal accident insurance:
What is Personal Accident Insurance?
Usually, whenever you think of financial support during illness or injury, the first option that comes to mind is a health insurance policy. As beneficial as health insurance is, it still has its list of exclusions. One of those exclusions is accidents. Hence, if someone is at a higher risk of accidents, a personal accident insurance plan is a good option for security.
A personal accident insurance policy is a financial tool that provides coverage for accidental death or disability. If you suffer from any accident that falls within the scope of the policy’s coverage, the plan pays a lump sum benefit that will help you in overcoming the financial loss due to the accident.
Types of Personal Accident Insurance Plans
There are two types of personal accident insurance plans, and they are as follows –
Individual personal accident policy
Under this plan, an individual is covered against accidental death or disability under the policy.
Group personal accident policy
Under this plan, a group of individuals is given coverage. Registered groups buy group insurance plans to get coverage for their members. These groups can be employer-employee groups, banks and their clients, clubs and their members, etc. A single policy is issued, and the policy covers all designated members of the group.
Features of Personal accident insurance plans
Accident insurance plans have the following essential features:
- These are fixed benefit plans that pay a lump sum benefit in case of covered contingencies
- Premiums are very low. In addition, the premium paid will qualify you for a reduction in your taxable income under Section 80D. If you are below 60 years of age or are 60 years of age or older, you will be entitled to deductions of up to ₹ 25,000 and ₹ 50,000, respectively. You must note that tax benefit is subject to change in tax laws.
- You do not have to take any medical examination to buy the coverage.
- The amount of insurance under the plan depends on your income
- Coverage is only available based on the sum insured amount for an individual. You will not receive coverage based on Family Floater coverage.
* Standard T&C Apply
Determining the sum insured under accident insurance
As mentioned earlier, the amount of insurance under personal accident insurance policies depends on your annual income. Coverage is expressed as a multiple of your yearly income, and how much it is multiplied depends on the insurance company. If you want to cover your dependent spouse and children, you need to purchase separate policies for each. Coverage for a dependent spouse is limited to 50% of your coverage amount. Similarly, child coverage is limited to 25% of your sum insured.
What is covered in an accident insurance plan?
The accident policy covers the following cases –
- Accidental death
- Accidental permanent and total disability
- Accidental permanent and partial disability
- Random total and temporary incapacity
* Standard T&C Apply
Benefits to be paid under accident insurance
The benefit to be paid under an accident insurance policy depends on the type of contingency you are suffering from. The benefits, in general, are as follows:
- In case of accidental death, you will get 100% of the sum insured
- In permanent total disability, you will get 100% of the sum guaranteed.
- In the case of a temporary total disability, you will receive a portion of the sum insured depending on the type of disability.
- In the event of a temporary complete disability, you will receive weekly benefits for the specified weeks.
* Standard T&C Apply
All these benefits can be yours if you buy personal accident insurance. Like with any other type of insurance, you need to make sure you make the right purchase if you want to make the most of your coverage. This means you must compare policies just like you compare health insurance or car insurance. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.