A Comprehensive Guide on Personal Accident Cover

Do you travel a lot due to your profession or personal reasons? If yes, you need to have a personal accident insurance cover. A health insurance policy can cover hospitalisation expenses, and a life insurance policy can cover death due to an accident. However, personal accident insurance provides many more benefits apart from these. Hence, you should have a separate personal accident cover along with life and health insurance cover. In this article, we will understand everything about a personal accident cover, its features and benefits, who should buy it, etc.

What is a personal accident cover?

A personal accident policy is a type of health insurance policy that provides coverage for accidental injuries, disabilities, and death. It provides a fixed pay out on the happening of a specified event (death, disability, etc.) due to an accident. The policy may provide other optional benefits, such as hospitalisation expenses, ambulance costs, funeral expenses, hospital cash benefit, protection against loss of income, child education benefit, etc.

Coverage under a personal accident insurance policy

The scope of coverage under a personal accident insurance policy includes the following:

1) Accidental death: If the insured gets injured in an accident and it results in death, 100% of the sum assured will be paid. The amount will be paid to the nominee or legal heir.

2) Permanent total disablement: If the insured suffers from permanent total disablement due to an accident, 100% of the sum assured will be paid. The permanent total disablement should be of the specified nature as per the policy terms and conditions. For example, total and irrecoverable loss of sight of both eyes, loss of use of both hands or feet, etc.

3) Permanent partial disablement: If the insured suffers from permanent partial disablement due to an accident, the specified percentage of the sum assured will be paid. The permanent partial disablement should be of the specified nature as per the policy terms and conditions. For example, for loss of use of one entire hand, 50% of the sum insured will be paid, or for loss of use of one ear, 15% of the sum insured will be paid. Check the policy wordings for the specified nature of permanent partial disablement and the percentage of the sum insured paid for it.

The personal accident policy may offer other benefits as part of the base policy or as optional benefits. Some of these include:

1) Temporary total disablement: If the insured suffers from the temporary total disablement due to an accident and is incapacitated from their employment/occupation, they will be paid a specified compensation at a specified frequency as per the policy terms and conditions. For example, the insured may be paid 1% of the base sum insured per week till they return to their employment/occupation. There may be a maximum limit for the number of weeks the benefit will be paid. The benefit may be offered as part of the base policy or as an optional benefit.

2) Hospitalisation expenses: If the insured is injured due to an accident and is hospitalised for a minimum of 24 hours, the policy will cover hospitalisation expenses. Check the policy terms and conditions for any limits on coverage (for example, up to a specified percentage of sum assured), inclusions, exclusions, duration of coverage, etc.

3) Hospital cash benefit: If the insured is hospitalised due to an accident, the policy will pay a daily benefit of a specified amount.

4) Broken bones: If the insured person sustains a bodily injury that results in broken bone(s), the policy will pay a specified percentage of the sum assured as compensation, depending on the type of fracture. For example, if there is injury to vertebral body resulting in spinal cord damage, the policy will pay 100% of the sum insured. If there is a shoulder fracture (collar bone or shoulder blade), the policy will pay 30% of the sum insured. Check the policy terms and conditions for details.

5) Burns: If the insured sustains a bodily injury which results in a certain degree of burns (for example, second or third-degree burns), the policy will pay a specified percentage of the sum insured. The amount payable will depend on the degree of burn and the part of the body where it has occurred.

6) Funeral expenses: If the insured sustains bodily injury/sickness that leads to death within a specified period, the policy will pay the funeral or last rites expenses to the insured's beneficiary.

7) Ambulance costs: If the insured sustains a life-threatening bodily injury, the policy will pay the ambulance costs for transportation to the nearest hospital. The amount will be the actual transportation cost or the specified amount, whichever is lower.

8) Child education benefit: If an accident results in the insured’s death or permanent total disability, the policy will pay the child education benefit. The benefit may be up to a certain percentage of the sum assured, payable per dependent child pursuing full-time education. Check the policy wordings for specific terms and conditions.

Features of a personal accident policy

In the earlier section, we understood the scope of coverage of a personal accident policy. Now let us look at the features of the policy:

a) Entry age: Usually, the minimum age at entry is 18 years. The maximum age at entry can be capped by the insurance company (usually at 65 or 70 years).

b) Minimum and maximum sum assured: The minimum and maximum sum assured will differ across various plans offered.

c) Modes of premium payment: The insured can choose the monthly, quarterly, half-yearly, or yearly premium payment mode.

d) Cumulative bonus: The policy offers a no-claim bonus (NCB) for every claim-free year. The policy may increase the sum insured by a specified percentage (for example, 5% per year). The cumulative bonus may be capped at a certain percentage of the based sum assured (for example, a maximum of 50% of the sum assured).

e) No medical tests: Usually, there is no medical test requirement for purchasing a personal accident policy.

f) No waiting period: A personal accident policy has no initial waiting period.

g) Customisation: The plan will provide you with optional add-on features, using which you can customise the policy as per need.

Who should buy a personal accident insurance policy?

If your work requires you to travel frequently, you should buy a personal accident policy, irrespective of whether you are salaried, self-employed or running a business. Some people do a long commute every day from home to the office and back. Some people are on the field daily as they are a part of the sales team. Some people travel out of town regularly for official meetings and other responsibilities. A personal accident insurance plan is a must in all the above cases.

Some people are in professions that are prone to accidents. For example, people working in mines, arms and ammunition factories, fireworks factories, the transportation sector, chemical and explosives factories, etc. People in all the above hazardous professions must buy a personal accident insurance policy.

What is not covered?

Some exclusions in a personal accident insurance plan include intentional injury, injury due to war, criminal activity, drugs, alcohol consumption, pre-existing illnesses, etc. Injuries while performing duty in the armed forces, police, etc., are excluded. For the complete list of exclusions, refer to the exclusion section in the policy document.

Buying a personal accident policy

While deciding on buying a personal accident insurance policy, take the following steps:

1) List down the features you are looking for, the cover amount you need, the premium you are willing to pay, etc.

2) Compare the personal accident policies based on in-built features, optional add-ons, inclusions and exclusions, premiums, etc.

3) If you wish to compare policies with similar features, consider the Saral Suraksha Bima policy. It is a standard personal accident insurance policy offered by all general and health insurance companies with similar features. In this category, ManipalCigna offers the Saral Suraksha Bima, ManipalCigna Policy.

4) If you are looking for a personal accident policy with enhanced customisable features, consider other personal accident insurance plans. ManipalCigna offers the ManipalCigna Lifestyle Protection Accident Care Policy.

5) Finalise the policy, pay the premium, read the policy terms and conditions on receiving the policy document, and enjoy peace of mind.

A personal accident policy is financial protection against unexpected accidents

A personal accident policy provides financial protection against accidental injuries, disabilities, and death. Not just that, it can offer you a host of other benefits as part of the policy or optional add-ons. A personal accident policy has a specific purpose. Hence, you should add it to your insurance portfolio along with life, health, and critical illness insurance. An individual has no control over unexpected events. However, they can be well prepared with financial protection against these events with personal accident insurance and other forms of insurance like life and health insurance. Once adequately insured, you can enjoy life without any financial worries.