Why personal Accident policy is important?

Better safe than sorry

Did you know that in recent years you have become more prone to accidents than you would have ever imagined? Some of these alarming statistics reveal that:

• There were nine road accidents that killed three people every 10 minutes in 2015, according to new national data, an increase of 9% over four years

• There were 464,000 road accidents in 2015, an increase of 3% from 2014, when there were 450,000 road accidents.

• 1214 road accidents occur every day in India’

Two-wheeler riders most at risk

Two-wheeler accidents accounted for 29% of all fatal road accidents in 2015, claiming 45,540 lives, followed by trucks (19%), which killed 28,910 people, and cars (12%), which killed 18,506 people.

Life is fickle. Anything can happen. You purchase insurance to protect yourself financially against such unfortunate events. A good insurance portfolio ensures that you (or your finances) are covered against all eventualities. Life insurance proceeds will ensure that your family achieves the financial goals in your absence. A health insurance plan will ensure quality health care for you and your family. Many of us are inclined to feel that if we have adequate life and health insurance, your finances (and the financial goals) are protected.

Is that true or are we missing something?

What about an accident or an illness that causes total or partial disability, which in turn compromises your ability to earn income at the level before accident. Life insurance will typically not cover such a scenario. Health insurance covers only hospitalization expenses. You can see there is a gap, which is not covered. It is in such cases that a Personal Accident Cover can come in handy. Personal Accident Insurance plans offer very limited coverage but are still better than nothing.

In this post, we shall discuss what a personal accident plan covers and what it does not cover. We will also discuss whether a personal accident plan is a must-have in your insurance portfolio

What is personal Accident insurance?

Personal Accident insurance or PA insurance is an annual policy which provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. It is different from life insurance and medical & health insurance.

You can either take a PA policy for yourself or a group policy for your family, protecting you and them anywhere in the world, anytime of the day. PA insurance provides 24-hour worldwide insurance protection.

What does Personal Accident Policy Cover?

A personal accident policy covers four major events:

1. Death due to accident or accidental injuries

2. Permanent total disability due to an accident or accidental injuries

3. Permanent partial disability due to an accident or accidental injuries

4. Total temporary disability due to an accident or accidental injuries

A personal accident plan may or may not cover all four. You can read the terms and conditions in the policy wordings to find out about the exact nature of coverage.

A point to note: Personal Accident Policy is a defined benefit policy i.e. on occurrence of an insured event; the insurance company pays Sum Insured (full or partial as defined under the policy) to the insured. There is no relation to hospitalization expenses. This is in contrast to regular health insurance plans, where only the hospitalization expenses are indemnified. Critical Illness Plans are defined benefit plans too.