What is a Personal Accident Insurance Policy?
The Indian Government, and other private insurance companies, are making strides in the direction of providing their customers the best and most comprehensive financial protection. Most insurance products grouped under the categories of life or health insurance don’t provide protection against disastrous events / unfortunate work accidents / accidental loss of life or the loss of the ability to earn an income. Personal accident insurance provides specific coverage against the loss of life / loss of limbs / disablement / etc. due to accidents of a general nature related to travel or work.
What is the Need for a Personal Accident Insurance Plan?
Accidents happen every day. From the danger of vehicle accidents during commutes to and from work, to the danger of being hurt by the tools used at work, to the dangers faced because of improper infrastructure, the list is endless. Personal accident insurance gives you the satisfaction of knowing that whatever accident may come to pass, you and your dependants will be financially protected by accidental insurance cover. It covers burns, cuts, broken bones, the cost for ambulances and medical services, hospitalization due to any kind of accident, loss of limbs / eyesight, etc. A larger or smaller range of coverage may be chosen at the time of taking the plan, depending on the insurer.
Why opt for Personal Accident Insurance with Life or Health Insurance?
Life insurance and health insurance are insurance products that cover specific eventualities and offer insurance coverage to mitigate the negative financial implications these eventualities have on the policyholder or his / her dependants.
Life insurance as a product provides a financial benefit to the dependants or nominees of a person who has lost his / her life.
Health insurance as a product acts as a cushion and mitigates the expenses incurred due to hospitalization for whatever reason.
Personal accident insurance as a product provides additional coverage for a wider range of possible accidents or disasters that could occur in our day to day lives. A personal accident insurance policy provides for coverage against the loss of limbs or disabilities caused due to accidents while travelling / commuting / in the workplace / due to the dangerous nature of work / due to external situations, etc. This is the insurance product to be purchased by those who wish to create a financially stable environment against all possible eventualities.
Difference Between Life, Health & Accidental Insurance Plan:
Term Insurance Plan
Health Insurance Plan
Personal Accident Policy
Coverage against financial burdens on the dependants of the policyholder in the event of the policyholder’s death.
Financial aid at the time of hospitalization to mitigate the overall expense incurred.
Coverage for burns, cuts, broken bones, loss of limbs / eyesight / hearing / etc., hospitalization and ambulance charges for accidental injuries.
Pays out benefit on death. Pays our benefit on maturity (in some cases). Pays out benefit on permanent total disability (in some cases). Pays out benefit on permanent partial disability (in some cases). Specific plans for women (in some cases).
Pays out benefit after the hospitalization process. Covers cost of ambulance. Covers cost of extended hospital rent (in some case). Covers the cost of wet nurse / hospice. Specific plans for women (in some cases).
Pays out benefits on death or permanent total disability / partial total disability. Pays out benefit for temporary disability (in some cases). Specific plans for women (in some cases).
Must be taken by everyone who has dependant family.
Must be taken by anyone prone to hospitalization because of health issues / traffic accidents / etc.
Must be taken by anyone who may be hospitalized due to the dangerous nature of work / dangerous commute / exposed to a dangerous work environment / who want to ensure peace of mind against the possibility of general accidents.
What are the Types of Personal Accident Insurance Policies Available in India in 2016?
Personal accident policies are offered by almost all the top insurance providers in India.
Most insurers offer the basic personal accident insurance policy package which pays out a benefit on death / disability due to personal accidents (wider than the coverage provided by health and life insurance policies).
Some policies even go so far as to pay benefits on temporary disabilities and partial disabilities. Some policies allow for the entire family to be covered as policyholders / the entire workforce to be covered under a group policy.
There are also policies that offer extended coverage against a wider range of eventualities or offer additional benefits payable for specific dangers that are faced by different individuals depending on the amount of risk they’re exposed to every day. Some policies can even be customized.
Factors Influencing Personal Accident Insurance Premiums:
Different types of insurance products take different factors into consideration while calculating the premium payable and coverage applicable on an individual basis for most customers.
Life insurance policies take factors like age, health, income, etc. into account to determine the premium paying capacity, expected lifespan, etc. of the customer.
Health insurance policies take factors like income, current state of health, etc. into account to determine the expected frequency of hospitalizations, etc. of the customer.
Personal accident insurance policies take factors into account like exposure to risk, employment category, etc. into account to determine the total risk exposure and likelihood of accidental injury, etc. of the customer. Age and income aren’t as big factors in this case.