Personal accident insurance is a policy that can provide you with financial protection against uncertainties such as accidental death, injuries, and partial or total disability resulting from an accident. In case of the policyholder’s unfortunate death, a lump sum amount is paid to the nominee. In this article, let us understand everything about personal accident insurance, including its types, benefits, and exclusions....Read More
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Alok Mishra
Insurance Writer
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Bhaskar Sinha
Insurance Expert
8+ years of experience in Life Insurance with expertise in Developing Life and Health Products, Digital Sales, Conducting effective trainings and Key Account Management.
A personal accident insurance policy provides protection against death, permanent total or partial disability, and temporary disability in case of an accident. In case of death or permanent disability, the insurer pays a sum insured, and the policy terminates thereafter.
While in the case of partial disability, only a percentage of the sum insured is paid depending on the severity of disablement, whereas a weekly compensation is provided in case of temporary total disability. The personal accident insurance policy is renewable if the accident results in permanent partial disability or temporary total disability.
The personal accident insurance policy can be seen as an income protection plan where your profession and income determine your maximum cover and premium rates. Generally, you can get a maximum cover that is 10 times your annual income, and the premium rates usually depend on your profession. You can use online premium calculator to calculate premium based on your profession.
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Both life insurance and health insurance products cover for specific eventualities and provide coverage to mitigate the financial implications of the eventuality. At the same time, personal accident insurance offers additional coverage for a wider range of possible accidents. It can provide coverage for loss of limbs or disabilities caused due to an accident at the workplace or while travelling, etc. This insurance policy can help you create a financially stable environment against any possible eventuality.
Let us look at some of the key things covered under the personal accident insurance policy: -
An emergency such as an accident can be both financially and emotionally distressing for the policyholder’s family members. In case the policyholder suffers fatal injuries or dies due to the accident, the entire sum insured is paid to the nominee as mentioned in the policy document.
If the accident results in permanent disability or lifelong impairment such as loss of limbs, then a pre-determined sum insured is paid to the policyholder depending on the severity.
Under the personal accident insurance policy, a certain percentage (up to 100%) of the sum insured is paid to the insured in case of bodily injuries resulting in permanent partial disability.
If the policyholder meets temporary total disability and gets bedridden, the insurer provides a weekly allowance as compensation for the loss of income. The insured can even use this claim amount to pay thei
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The personal accident insurance policy can be divided into two categories. Let us briefly talk about both types: -
Personal accident insurance is a useful policy to get financial assistance for yourself and your family in the event of an accident. This policy provides comprehensive coverage for accidental death or disabilities. Here are some of the benefits provided under this policy: -
Most personal accident insurance policies offer the benefit pay-outs for the dismemberment of any kind occurring due to an accident. The insurers have pre-determined percentages and ratios in which the benefit is paid to the policyholder.
This is an optional extra coverage under the personal accident insurance policy. And this additional insurance covers the possible dismemberment or death due to burns. The cost of treatment is reimbursed to the insured after hospitalization.
The insurance company reimburses all or part of the expenses incurred at the hospital. All the medical expenses, room rent charges, doctor’s consultation fees, medical tests, etc., are considered for reimbursement.
Some insurance companies provide daily cash allowance for the expenses arising due to hospitalization. This allowance to meet the unexpected hospital expenses can be given for up to 30 or 45 days of hospitalization.
Depending on the insurer, the policyholder may or may not be eligible for the education grants pay-out. An additional amount to be used for tuition fee payment for the dependent children is paid out to the policyholder. This is a common benefit provided by many insurance companies.
Under the personal accident insurance policy, some insurance companies also provide coverage for the cost of transportation of the mortal remains of the insured person.
Life and health insurance products offer protection against specific financial eventualities, while personal accident insurance offers wider coverage for possible accidents. Here is a brief comparison of these three types of insurance policies: -
Exclusions refer to the provisions under an insurance policy that restricts coverage due to certain conditions. It includes the things that are not covered under the plan. The personal accident insurance policy also has some exclusions. They may vary with the insurer, as the comprehensive list of exclusions is only communicated to the policyholder.
Here is a general list of exclusions under the personal accident insurance policy: -
An emergency such as an accident can be both financially and emotionally distressing for the policyholder’s family members. In case the policyholder suffers fatal injuries or dies due to the accident, the entire sum insured is paid to the nominee as mentioned in the policy document.
If the accident results in permanent disability or lifelong impairment such as loss of limbs, then a pre-determined sum insured is paid to the policyholder depending on the severity.
Under the personal accident insurance policy, a certain percentage (up to 100%) of the sum insured is paid to the insured in case of bodily injuries resulting in permanent partial disability.
The claim for a personal accident insurance policy will be rejected if the accident is determined to have been caused while the policyholder was riding a two-wheeler with an engine capacity of more than 150cc.
If it is found out that the accident leading to death or disability is caused because the policyholder suffers from an STD, the claim will not be honoured.
The involvement of policyholders in any kind of public disturbance, protest, riot, strike, demonstration, etc., can cause the personal accident insurance claim rejection.
Injuries caused due to policyholder’s duty with the military, paramilitary, or police force are also not covered under the personal accident insurance policy.
If the injuries are caused due to participation in unsafe sports such as mountaineering, rafting, bungee jumping etc., the claim will be denied.
If the accident occurs as a result of a pre-existing medical condition or a worsening illness, the policyholder will not receive the claim benefits.
The claim arising from pregnancy or childbirth-related issues will not be covered under the personal accident insurance policy.
Here are the eligibility criteria for the personal accident insurance policy: -
ARN NO: PCP/PAI/220124
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