Why you should buy Personal accident Insurance
Everyone is talking about importance of life and Health Insurance cover to protect yourself or your family from any financial hardship but have you ever thought your earning power or capacity would immediately impacted if disability strikes you.
If in any accident you lost any limb, or stay bed ridden for 2-3 months due to any injury, how many of us could still stay financially independent and earn a regular income?
Most people need a long term disability coverage to insure their future earning power and this coverage is offered by Personal Accident Insurance Policy.
So it is wise to have a Personal Accident Insurance for each and every earning member of family as well for your maid, your cook, driver or anyone who depends on regular income as it will cost you less than Rs.2000/- annually for coverage of Rs.10 lakh.
Personal accident insurance Policy coverages
Personal accident insurance provides coverage against any serious disability occurred due to an accident and broadly classified under following four categories by most of insurance companies-
Permanent Total Disability- Physical impairment due to loss of core faculty of body which is irrecoverable and directly affects any person’s earning ability is covered under this section. Such as losing both hands/legs/eyes or one limb and one eye.
In this case of permanent total disablement insurance company pays 100% of sum insured.
Permanent Partial Disability- Injuries that are irrecoverable and make a person partially disable such as loss of one limb or one eye , loss of hearing ability, loss of senses etc.
In case of Partial Permanent Disability insurance companies pay a certain percentage of sum insured which varies from 2% to 75% depending on policy terms and conditions.
Temporary Total Disability- Bodily injuries due to an accident that makes you temporarily bed – ridden and immobile.
In this case , a fixed benefit amount usually 1% of policy sum insured per week is provided. It is advised here to confirm this benefit amount from your insurance company while purchasing the same as some companies have limit of maximum amount payable per week and maximum number of week limit is also there.
Accidental Death- This policy provides 100% of sum insured in case of death of insured person resulting from accident.
There are many fixed amount and reimbursement based optional covered offered by insurance companies by charging some extra premium, popular ones are here under-
a.) Medical Expenses
b.)Dependent Child Education Fund
c.) Funeral Expenses
d.)Hospital daily cash allowance
f.) Transportation cost incurred for carriage of body
What is not covered
– Accidents under the influence of Alcohol or any other intoxicant
– Injuries arised due to involvement in Criminal act or riots
– Suicidal injuries
– Injuries arised due to adventure sports
– Child birth or pregnancy
There might be more exclusions as declared under policy terms and conditions. So do not forget to take a look at policy terms & conditions.
Personal Accident Insurance Claim Process and Required documents list
In order to get the personal accident insurance claims on time, it is important to be aware of the claim process and documents to be submitted to the insurance provider.
First always immediately intimate your insurance provider within 24 hours of accident occurred and to claim your insurance most common documents required are listed here. Though it is not exhaustive list as list of required documents can be differ as per your insurance company.
· Duly filled in claim form available on your insurance company website
· Death certificate
· Disability certificate from doctor
· Post-mortem report
· Doctor’s report
· FIR copy
· Medical certificate
· Investigation report
· Medicine bills
· Discharge summary, if hospitalized
Frequently Asked Questions
1. How much cover should you choose?
To get an adequate cover for your earnings, you should choose maximum i.e. 100 times of your monthly earnings. Let say, if your monthly salary is Rs. 50000/- you can easily get a personal accident insurance cover of Rs. 50 Lakh.
Also, mostly insurers may need your ITR copy or salary slip as a proof of your gainful income. Here dividends, rental income are not considered as a part of your gainful income as these income are not going to affect in case of disability strike you.
2. What if you forgot to renew your Personal accident policy?
In case of Personal Accident Insurance, if you forget to renew your policy it will only affect your cumulative bonus or no claim bonus but you will be considered as covered for the year you have paid your policy premium.
3. Should you buy Personal Accident Insurance if already having a Life Insurance?
In case of death our living expense also come to end but if a misfortune brings disability to you, your living expenses are going to shoot up as well your hardship to earn money.
As your life insurance policy provides cover against natural or accidental death but not provide any cover against disability, so it is wise to get a personal accident insurance along with life insurance.
Also, Premium for personal accident policy is very nominal if we compare it with life or health insurance premium.
Health insurance is to cover your medical expenses whether it is due to any illness or accident during your hospitalization period.
But, it will not safeguard your most valuable financial asset that is your earning power. When you are not able to go for work and bring income to home, personal accident insurance plays a major role to protect you against financial hardships.
5. Is premium of Personal Accident Policy depends on your age?
No, premium for Personal Accident Insurance do not depend on your age as it depends only on your occupation. You can buy personal accident cover in any age without paying any extra premium whether you are 40 or 50 years old.
Insurance companies has divided occupation based risk in three category and premium is related to your risk category-
Occupation Based Risk Categorization
Risk Class I
Risk Class II
Risk Class III
Risk – Moderate
– Administrative Jobs
– IT or Software related jobs
-Any Person engaged in adventure sports activity, skiing, river rafting etc.
6. What type of accident or injuries are covered under Personal Accident Insurance?
This Insurance provides coverage not only for road accidents but any type of accident that is involuntary in nature be it you accidentally slipped in bathroom or from stairs, attacked by animal or bitten by snake, hit to a pole etc.
Group Personal Accident Insurance is provided by your employer where an employer buy a Group PA policy for all his employees and amount will be depend on your salary as provided by employer.
No, there is no tax rebate provided by government under personal accident insurance.
So, final words are –
Buying personal accident insurance cover is not at all expensive and it provides cover to your regular income. Some companies provide this cover of Rs. 1 lakh only for Rs. 120/-.
If you are earning member of your house and planning to get this insurance, you can also cover your spouse and children in the same policy.
But, fact is that most people are not aware about their benefits of personal accident insurance and avoid to buy this due to unawareness while in reality it is great protection plan against any accidental mishappenings.