Personal Accident Insurance Is A Must: Here Is Why

When we think of personal insurance, health and life insurance come to mind. While health insurance provides cover when one is hospitalised due to medical reasons, life insurance provides much needed financial support in case of unfortunate demise of the insured.

However, does that cover all possible exigencies? An accident may result in someone being disabled and not being in a position to carry on with normal activities, but it may not kill someone. What happens in that case? 

This is where personal accident insurance comes in. 

Low Awareness Levels
Indians’ level of familiarity with personal accident insurance varies significantly. “While a segment of the population, particularly in urban areas, is well-informed due to efforts by insurance companies and financial literacy programs, a considerable number of individuals still need more awareness. Personal accident insurance is often overshadowed by more traditional forms like life and health insurance,” says Rakesh Jain, CEO, Reliance General Insurance. 

What It Covers
This policy covers accident-related issues such as death, permanent or temporary disability, and medical expenses. If the policyholder dies in an accident, the insurer pays the accidental death benefit to the nominee.

“For total permanent disability, several insurers pay 100 per cent of the sum insured if the policyholder becomes injured and, as a result, cannot work for the rest of his life,” says Rakesh Goyal, Director, Probusinsurance.com, an insurance broker. 

There are variants to personal accident policies as well. “There are also policies which provide restricted cover or combinations of coverage, such as accidental death only, accidental death and permanent total disablement, accidental death, permanent and temporary disablement etc,” says Hari Radhakrishnan, member, Insurance Broker Association of India (IBAI) and Regional Director, First Policy Insurance Brokers.

Personal accident insurance thus provides comprehensive coverage for any harm due to accidents. 

First it covers accidental death, and provides financial support for the family of the policy holder. Second, if there is a permanent or total disability and the insured earning capacity is affected, it provides a financial cushion. Third, it also covers medical expenses when hospitalised due to an accident. 

“Specific benefits, such as coverage for fractures, burns, emergency evacuation, trauma counselling, and child education benefits, are provided to secure the future of the policyholder’s children. Few policies also offer worldwide personal accident cover with the travel care feature,” says Jain. 

You can get a standalone personal accident policy and also get it as a rider with health insurance.

How Much It Costs 
How much a personal accident policy costs depends on the sum insured and the benefits. “It also depends on the occupation - blue collar or white collar, whether any risky work is being performed,” says Radhakrishnan

Personal accident policies are also not expensive. “The starting price is as low as Rs 700, including goods and services tax, per year, for a sum insured of Rs 10 Lakhs,” says Goyal. 

Accidents can happen to anyone. Unlike health or life insurance, personal accident insurance protects you financially if an accident disables you or even for medical bills. It's affordable and offers peace of mind - a safety net for you and your family.