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Personal Accident Insurance

Personal Accident Cover

Last Updated 31st Oct 2020

  • The Personal Accident covers for death, bodily injuries and disabilities caused due to an accident.
  • The accident cover is for all mediums, i.e., travelling through road, rail and air.
  • Personal Accident Insurance is highly cost-effective as the benefit provided by them is far more than the premiums it charges.
  • The benefits of availing accidental insurance range from 24x7 support to cover for other expenses like ambulance, hospitalization, transport of mortal remains from site, etc.
  • The decision to avail accident insurance must be made based on the safety and protection of you and your family, instead of any tax benefit.

What Is Personal Accident Insurance?

Personal Accident Insurance is an insurance that provides financial cover or protection to you from the unexpected and misfortune event of an accident. The damage caused by such incidents can be any degree from mild to severe or life claiming. Therefore, getting a cover against the damage caused due to accidents is a far better option.

The Accident Insurance provides cover for accidental bodily injuries, death, partial and total disability, a permanent and temporary disability which has been caused due to the accident. In case of death due to the accident, the nominee is provided with 100% compensation. The insurance scheme includes various compensation for different kinds of disability caused due to accidents.

Types of Personal Accident Policy

The Personal Accidental Policy can be classified into two main heads, these are:

Individual Personal Accident Insurance

As the name suggests, it is the accidental policy which covers an individual against the possible mishappening due to an accident. The insurance provides cover for accidental death, any permanent disability like loss of sight or a limb, etc.

Group Personal Accident Insurance

Employers avail group accident insurance for its employees. In some industries like mining, it is mandatory for employers to avail accidental group insurance where there is a high chance of accidents happening during work. In some cases, insurers provide a discount on premiums in case of group insurance. However, its benefits may be limited in comparison with individual personal accident insurance.

What does Accidental Insurance Cover?

An Accidental Insurance provides cover for the following:

  • Benefit for Permanent Total Disability: A major accident can cause a total disability permanently in which case financial assistance becomes crucial as the injured can no longer participate in any work or occupation. Permanent total disabilities like loss of eyes, or limbs are included for providing 100% of the insured sum.
  • Benefit for Accidental Death: It is the basic protection in the policy to provide 100% insured sum to the nominee in case of death caused due to accident. Major injuries caused and death from accidents are devastating for the family, the complete insured amount acts as a small cushion to help them move on.
  • Partial Permanent Disability: Injuries like loss of vision in one eye, knee injuries, nerve damages, etc. are examples of partial permanent disability. These injuries major and most policies have the clause of providing 100% of the insured sum in this case as well.
  • Temporary Total Disability: In case the insured is entirely bedridden, fracture, etc are also covered under the insurance. The cover, in this case, is up to 100% depending upon the policy chosen and the injury.
  • Additional Benefits: The policy also covers additional expenses like hospital expenses, OPD expenses in case of fracture, etc. are also included in the policy.

Why should you take a Personal Accident Policy?

Road accidents are one of the major causes of death in India. Temporary injuries can easily disincline a person temporarily while the major injuries cause severe damage to an individuals’ life and overall well being.

The personal accident provides compensation in case of accidents that occurred while travelling through road, rail, air. It covers for demise, bodily injuries, impairment, burn, or mutilation occurring due to accident.

The compensation under the accidental policy is provided for injuries, and disabilities irrespective of the intensity of the accident. In case of death due to accident, the objective of the accidental policy is to provide the family members of the deceased with financial support. Whereas, in case of impairment or disability, the compensation is given to the policyholder for the loss of income.

Difference/Comparison between Accidental Insurance & Life Insurance

Basis Life Insurance Accidental Insurance
Condition of Death The benefit under life insurance is given even if the death occurred months or years after the illness. The benefit is provided if the death occurs immediately or within a specified time after the accident, which is usually around 180 days.
Cause of Death It provides benefit for all causes of death except suicide. The benefit is provided only when the cause of death is an unexpected accident.
Partial Benefit There is no benefit provided under life insurance for loss of sight or limb or any other condition for a partial benefit. The partial benefit is covered in case of loss of sight, limb or any other permanent or temporary total disability.
Variety of Plans Life insurance covers a variety of plans like retirement planning, death cover, short and long term financial goals, etc. The accidental insurance covers only against the injuries or death caused due to an accident.

Benefits of Personal Accident Insurance Policy

When an individual meets an unexpected accident and suffers a permanent disability, then the after-effects of the accident do not just include the physical disability but also means no income and only expenses which range from bank EMIs to hospital bill and other expenses. That’s why getting an accidental insurance cover is highly recommended. Some major advantages of having an accidental insurance policy are:

  • It has both individual and family plans.
  • The insurance companies nowadays provide 24*7 support.
  • There is a sense of family security when there is insurance protecting you against the aftermath of an accident.
  • The claim process is easy and certified.
  • You do not need to undergo any medical test to get the policy.
  • The coverage under the accidental policy is substantial as compared to its premium.
  • The indemnity is doubled in case of demise or impairment while travelling through public transport.
  • The insurance companies now provide customized plans.
  • Legal and funeral expenses are also covered for in the policy.
  • Daily allowance to cover the hospital expenses in cases of accidental hospitalization.
  • Compensation for the ambulance to carry the insured to hospital post-accident.
  • Cover for transportation to the nominee in case of the death of the insured due to accident for carrying the mortal remains from the accident site to home or cremation centre.
  • Compensation for burns, fracture and any damaged bone is also covered under the policy.
  • The cost of education for the dependent’s child is also covered to a specific limit under the policy in case of death.
  • Some insurers also provide benefits for the alteration of one’s house and vehicle due to the permanent total disability of dismemberment caused due to the accident.

Tax Benefits of Personal Accident Insurance Coverage

There is no tax benefit provided under the Income Tax Act, 1961 for the premiums paid towards the accidental insurance policy. However, it is of grave importance to understand that the Personal Accident Insurance must be availed to safeguard yourself and your family. The decision regarding insurance is not something to be made based on tax benefits available or not.

Claim Filing Process Of Accidental Insurance

For claiming the benefit, the insurance provider must be informed within a specified time limit about the accident. Upon confirming you are likely to be provided with a claim reference number. The documents or information you need to provide during the claim process are:

  • Policy Number
  • Date and time of the accident
  • Contact Number
  • Location of the accident
  • Name and contact of the insured person who got injured
  • A brief description if possible about how the incident took place
  • The extent of the loss

Since the information is most likely to be provided by the family members, thus, they must know about the policy, whom and when to contact in case of such incident, and necessary information about the policy.

The documents required in case of death or impairment claim are:

  • Death Certificate (in case of accidental death)
  • FIR Report
  • Post-mortem report
  • Medical Certificate
  • Medicine Bills

As a precaution, the policyholder along with family members, must know what documents and bills to keep safely for future reference.

FAQs

What is covered under personal accident insurance?

Under the personal accident insurance, the cover is provided for the damage caused due to accidents like death, total permanent disability, partial permanent disability, total temporary disability, along with various other expenses like hospital expense, cremation expense, dependents child education, etc.

Is personal accident cover mandatory?

No, availing a personal accident cover is not mandatory. However, it is highly recommended as it will provide peace of mind and in case of misfortune, it will help financially and provide a cushion of comfort in times of deep stress, anxiety and loss.

Why do I need personal accident insurance?

It would be best if you had a personal accident to help you financially, in case of disability due to an accident and provide the needed financial assistance to your family in case of death due to an accident along with other medical and hospital-related expenses.

Is personal accident insurance the same as income protection?

It is not the same as income protection, but it's similar to the income protection objective to provide you with financial assistance when you are unable to perform any job.

Is personal accident insurance tax deductible?

No tax benefit is provided for the payment of premium for personal accident insurance under the Income Tax Act, 1961.


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