The personal accident insurance policy provides protection against financial crisis in case of accidental death or disability. The damage caused by an accident is often irreparable, but some of the financial expenditure can be compensated for with the help of a personal accident cover. The instances included under this policy are rail, road, air, burns, injury due to collision or fall, drowning, acts of terrorism, etc. Hospitalisation charges are also covered, in addition to the pay-out for loss of income.
Types of personal accident cover
One classification of personal accident insurance policy is as follows:
1. Individual accident insurance: It serves an individual in case of an accident that causes death, impairment, and temporary or permanent wounds, whether intentionally or unintentionally.
2. Group accident insurance: Taken by employers for employees, this is available at a low cost, and therefore may not offer all the advantages given by individual insurance plans.
The types of conditions covered under a personal accident insurance plans are as follows:
1. Accidental Death: If the policyholder dies in an accident, the entire sum insured is paid to the nominee mentioned in the policy documents.
2. Permanent Total Disablement (PTD): If the accident causes a permanent loss of functionality of one or two limbs, loss of eyesight or hearing, and lasts longer than 365 days, it counts as permanent total disablement. The amount is paid in full to the policyholder.
3. Permanent Partial Disablement (PPD): If the damage caused is partial, but without chance of recovery, and lasts longer than 365 days, it counts as permanent partial disablement. The amount is paid according to the extent of the damage, as a certain percentage of the sum insured.
4. Temporary Total Disablement (TTD): If the disability lasts for less than 365 days, it is considered temporary. In this case, a weekly benefit is paid instead of a lump sum amount. A certain percentage is paid in each instalment, up to the maximum sum insured.
The other benefits of personal accident cover include hospitalisation charges, medical expenses, child education support, daily allowance, life support benefit, etc.
However, natural death, childbirth, pregnancy, being under the influence of intoxicants, suicide or self-harm, pre-existing disability, etc. are excluded.
Importance of personal accident cover
An unforeseen incident like an accident can throw an entire family into financial distress in addition to psychological distress. Not only does treatment burn a hold in the pocket, but there is also a loss of income if the affected person is the breadwinner of the family. Thus, there is no right age to take a personal accident insurance policy. It is advisable to take one as soon as you start earning, and be partly prepared by having a strong financial back-up.