Why to buy accident insurance?

Why to buy accident insurance?
Personal Accident Insurance Policy gives complete financial protection against all accidental occurrences that might lead to death or bodily injury of the insured person. If the accident leads to the untimely death of the Insured, this Policy will provide complete financial security to the Insured’s family members. A Personal Accident Insurance policy covers you against death, permanent disability, permanent partial disability, and temporary total disability. For death and permanent disability – its pays you the total sum insured and for temporary disability it pays you a weekly compensation of around 1% of Sum Insured per week, for 52 weeks.

What is an Personal Accident?
Accident means any sudden or unexpected event, which leads to a permanent physical disability or accidental death.

What is the meaning of “Personal Accident” in insurance terminology?
Personal Accident is defined as an accident due to external, violent and visible means in insurance terminology.

What does ‘External’ mean with regards to personal accident insurance policies?
With reference to personal accident insurance policies, ‘External’ is any impact that is outward and on the exterior. Internal impact like diseases and natural causes of sickness or heart attack is not covered under this policy.

What does ‘violent’ mean with reference to personal accident policies?
The force of the impact that caused injury in relation to the compensation claimed can be termed as ‘violent’ when referring to personal accident policies

What does ‘visible’ signify with reference to personal accident policies?
With respect to personal accident policies, ‘visible’ is denoted by the result of the impact, which caused the injury. The injury must be either physically or clinically visible.

Who can take the Personal Accident policy?
Any adult residing in India can take the policy covering himself / herself and dependent family members between the ages of 18 and 70 years. In case of dependent children, they can be covered between age 5 yrs to max 25 yrs can be covered.

How to select the sum insured?
It is very difficult to put a value to a human life. Hence the principle of indemnity cannot be applied in this policy. However it becomes necessary to apply some yardstick for fixing the sum insured so that human lives are not overvalued for ulterior motives. Hence the capital sum insured is restricted to 72 months income from gainful employment. This means that income from property, shares etc. will not be taken into account. For non working spouse, the sum insured is restricted to 50% of the sum insured of earning spouse subject to a maximum of Rs.1,00,000/- and for dependent children to 25% of the sum insured of earning parents subject to a maximum of Rs.50,000/-.

Types of Personal Accident Insurance Policies –
A. Basic Cover – Covers Accidental Death (AD ) only.
B. Wider Cover – Covers against Accidental Death (AD), Permanent Total Disablement (PTD) & Permanent Partial Disablement (PPD)
C. Comprehensive Cover – Covers against Accidental Death (AD), Permanent Total Disablement (PTD), Permanent Partial Disablement (PPD) & Temporary Total Disablement (TTD)

What is Permanent Total Disablement?
Permanent Total Disablement refers to the absolute disability of an injured person after which he or she cannot engage in any employment or occupation of any description on a permanent basis.

What is Permanent Partial Disablement?
Permanent Partial Disablement (PPD) refers to disability of an injured person for permanent loss of use of a body part.

What is Temporary Total Disablement?
Any accidental injury that is the sole and/or direct cause of total, yet temporary disablement as long as the injured person is totally and completely unable to engage in any employment or occupation of any description can be termed as Temporary Total Disablement.

Compensation Benefit
The compensation benefits will depend upon the nature of injury and the Capital Sum Insured under the Policy.

For Accidental Death or Permanent Total disablement – Full Capital Sum Insured will be paid.
For Permanent Partial Disablement the compensation would depend on the nature of injury and corresponding percentage of Capital Sum Insured, as per Policy document and/or as per the medical advices of appointed Medical Practitioner of the insurer.
For Temporary Total Disablement the compensation would be 1% of Capital Sum Insured or Rs 5000/-, whichever is less per week for a maximum period of 52 weeks.

Additional Add-on Covers
In case of payment of additional premium, the following additional benefits can be availed –
1. Education
In the unfortunate event of death or loss of limbs/eyes or permanent total disablement of the Insured, the education cost of dependent children is covered under the Policy upto specified limits.
2. Employment
This cover provides financial compensation up to specified limits in the event of loss of employment of the Insured following an accident resulting in loss of limbs/eyes or permanent total disablement.
3. Ambulance
If any accident results in the use of an ambulance by the Insured to reach a hospital, then the policy will pay the necessary charges up to specified limits.

What extra benefits can be covered?
On payment of extra premium, Personal Accident Insurance Policy can also be extended to provide a whole range of additional coverage, like –
1. Medical Expenses
In addition to the death or disablement benefits, the Policy will provide reimbursement up to specified limits for medical expenses incurred for treatment following an accident.
2. Cost of Supporting Items
If the use of supporting items like crutches, wheelchair, artificial limbs etc. becomes necessary due to injuries sustained in an accident, then the costs are reimbursed up to specified limits.
3. Cost of Travel
If the Insured is disabled in a place other than his normal residence due to an accident, then we will pay up to specified limits for cost of travel of the injured person for returning home and also for the travel cost of any accompanying friend or relative to join the Insured and for returning home.

What is not Covered?
The Personal Accident policy does not cover any claim arising out of –

Any existing disablement / accidental injury prior to the inception of the policy
Accidents from dangerous sports
Pregnancy or childbirth
Self-injury, suicide or attempted suicide
Under the influence of drugs, alcohol and other Intoxicants
Venereal disease, AIDS or insanity
War and nuclear risks, terrorism, criminal acts, etc

Benefits provided under PA Policy –1. Family Discount Insurer offers a discount of 10 per cent if a person proposes to cover his spouse, on premium rates.
2. Health Check up
There is no medical test/ health check up required to obtain the cover. So age is no matter, since you are covering only for accidents.
3. World wide cover
The Personal Accident cover is valid world wide.
4. Cumulative Bonus
A cumulative bonus is given, whereby the capital sum insured is increased by 5 per cent every year on claim-free renewals subject to a maximum of 50 percent of the Capital Sum Insured.

Note – Read the policy document carefully to understand – what all your policy covers, as for every add-on, premium rates would be different. Also, similar to other insurance policies, there are exclusions in personal accident policies, too.