Why Should You Buy Personal Accident Insurance Policy?

Why Should You Buy Personal Accident Insurance Policy?

Life is uncertain and to compensate and provide financial support during such times, a personal accident policy is a must. It provides financial support to the policyholder if he becomes disabled due to an accident. A few common insurance covers are life insurance, health insurance, and motor insurance. Very few of us are aware of personal accident insurance plans that are of great help especially at the time of emergency. In this article, we would get to know more about the policy and who are eligible for it.

How Personal Accident Policy is Beneficial?

The need for a personal accident policy arises from the fact that a life insurer offers financial security only in case of death of the policyholder. Accidents however could render one disabled temporarily or permanently, resulting in loss of income, besides an additional burden of medical expenditure. A personal accident policy not only pays at the time of death, but also financially secures you and your family in the event of an accident. It curtails financial constraints that may arise due to income loss.Minor accidents like falling off a bicycle or fracturing an arm are covered by the policy.

What does Personal Accident Policy Cover?

A personal accident plan is equipped with the following features:

  • Accidental death benefit – In the unfortunate event of death of the policyholder, the insurer pays the entire sum insured to the nominee.
  • Permanent total disablement – In this case, a certain percentage of the sum insured will be paid to the policyholder.
  • Permanent partial disablement – In this case, a small percentage of sum assured is paid to the policyholder on a weekly or monthly basis. For instance, loss of hearing in one ear, loss of index finger/any other finger, loss of one hand, etc.
  • Temporary total disablement – The policyholder is entitled to get weekly benefits for accidents resulting in confinement up to 104 weeks. For example, fracture in hands or legs.
  • Education grant – The policy bears the education cost of maximum two dependents kids up to the age of 23 years.
  • Transportation of mortal remains – In the unfortunate event of an accidental death, the insurer pays a fixed amount towards transportation of mortal remains.

What is not Covered under Personal Accident Policy?

Accidental policies do not cover disability or death due to:

  • Intentional self-injury, suicide
  • Influence of intoxicating drugs or liquor
  • Breach of law with criminal intent
  • Pre-existing disability/accidental injury
  •  Death or disablement resulting from child birth and pregnancy
  • Terrorism

How is Premium Calculated?

In case of personal accident policies, coverage and premium depends on the current level of income and nature of the applicant’s occupation. If you are a teacher living in Delhi, then your chance of meetingan accident is less than a miner. For calculating the premium, insurers have categorized occupations according to the risk level.