Many people opt for different financial policies and covers to guard against difficult times. Among the myriad choices, we have personal accident insurance scheme to choose from. The policy is helpful in protecting from financial troubles caused by accidents. Also, it helps the family to recover financially in the event of death. It is a type of policy that helps in recovering from economic loss due to accidental disability or death.
Before we look into the benefits of personal accident insurance here are some alarming statistics. As per the Road Accident Report for 2019, a total number of 449,002 accidents took place in the country during the calendar year 2019leading to 151,113 deaths and 451,361 injuries. However, a personal accident insurance policy covers more than road accidents. For example, it includes gas cylinder blast to electric shock, sliding at the bathroom, injuries caused while at the gym, and drowning, fire accidents etc.
Types of Personal Accident Insurance
The personal accident insurance can be broadly classified into two categories – Group Accident Insurance and Individual Accident Insurance.
- Group Personal Accident Insurance
As the name suggests, the business owners or employers buy group personal accident insurance to cover their employees. Depending on the size of the organisation, and the number of employees, the insurance companies offer a discount on the premium. This serves as an incentive for the employees as financial safety is taken care. A group personal accident policy is an excellent incentive for the employees as it assures them financial safety in the event of any mishap at the workplace.
- Individual Personal Accident Insurance
This is an individual policy that guards the policyholders against the accidental damages. It usually covers accidental death, loss of body parts and other disabilities resulting from an accident.
What is covered?
Accidental death- In the event of death due to an accident, the policy holder’s family (or nominee) gets accidental death compensation of Sum Insured Value just before death (usually 100%+ no claim bonus). Some insurance policies also provide for reimbursement by way of payment of lumpsum on education expenses of two kids under the Education Fund.
Accidental permanent disability- It covers a policyholder in the case of loss of one or more limbs due to an accident or one or more parts of his/her body gets dismembered. The insured person is liable to get a certain amount as reimbursement of treatment cost (usually 100 to 125 per cent of the Sum Insured).
Accidental permanent partial disability- One can avail the benefit of the policy in the event of loss of one index/thumb finger or one ear or loss of vision in one eye or loss of one hand/arm/leg- partial damage of permanent nature which is irreversible. Here, the compensation is a calculated percentage of the Sum Insured.
Accidental temporary disability- When the policyholder gets severe injuries that have made him/her temporarily disabled/physically disadvantaged (physically challenged). In this case, he/she is entitled to get a lump sum compensation for the number of days where he/she is not able to work.
Medical reimbursement for health complications that have arisen from the accident- Many personal accident policies also provide reimbursement for medical complications that have arisen due to an accident, like treatment of mental trauma (cost of medicines or cost of psychiatric counselling sessions), and so on.
To learn more about the benefits and how to apply for personal accident insurance, get the April 2021 digital copy of Consumer VOICE.
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