Personal Accident Insurance policy provides complete financial protection to the insured members against uncertainties such as accidental death, accidental bodily injuries, and partial/total disabilities, permanent as well as temporary disabilities resulting from an accident. In the case of accidental death of the policyholder, the nominee gets 100% compensation from the insurer. There are various other compensations that are offered for accidental disability such as loss of eyes, limbs, and speech.
An accident does not come knocking at the door. It can happen anytime, anywhere and may result in minor to serious injuries. Any such uncertainty may lead to financial crisis, and that is why it is recommended to buy a Personal Accident Insurance policy. It will provide the necessary financial assistance to you and your family against accidental death, bodily injuries and disabilities (Partial/ Permanent/Temporary). There are various other rider benefits such as accidental hospitalization cover, Hospital Confinement Allowance, and Medical Expense Cover.
Types of Personal Accident Insurance Policy
Personal Accident Policies can be further divided into two sub-heads. Here’s a quick rundown of the two variants:
Individual Accident Insurance
This type of policy guards an individual in case of any accidental damage. It covers accidental death, loss of limbs or sight, or other permanent disabilities resulting due to an accident.
Group Accident Insurance
Group Accident Insurance is taken by employers to get coverage for their employees. Depending on the group size, some insurers also provided a discount on the premium. It is a good incentive/ value-added advantage for small organizations as it is available at low cost. However, this is a very basic plan and may offer limited benefits compared to an individual plan.
Accidental Insurance Coverage
You can avail the following coverage benefits with a personal accident insurance policy –
Accidental Death Cover
An accident can be both emotionally and financially devastating for the dependent family members. In case of fatal injuries, the entire sum assured is paid to the nominee as mentioned in the policy document.
Permanent/Total Disability Cover
In case an accident results in permanent disabilities or lifelong total impairment such as loss of both the limbs, then a specified sum insured amount is paid to the policyholder.
Permanent Partial Disability Cover
If bodily injuries, resulting in permanent partial disabilities, then a certain percentage (up to 100%) of the benefit is paid to the insured.
Temporary Total Disability
In case the insured meets with temporary total disabilities and is bedridden, then the insurer will provide a weekly allowance to recompense the loss of income. The insured can also utilize this claim amount to pay the EMIs, in case there is a loss of earnings.
Why Should You Buy a Personal Accident Insurance Policy?
You can buy a personal accident insurance cover irrespective of your age, occupation, and health. In fact, you should buy this plan as soon as you start earning. It is more important for those who have taken loans or have to pay EMIs because this would offer protection towards repayment of the outstanding balance under any such situation. The premium of this policy will be decided on the basis of your occupation rather than age.
How Much Accidental Insurance Coverage is Enough?
As a thumb rule, it should be 100 times of your monthly income. For example, if your current earnings are Rs. 10,000 then you can buy a personal accident cover of Rs. 10,00,000.
It will ensure that all the eventualities such as child education, loan repayment, marriage, and regular earnings for the spouse are taken care of, provided the policy is renewed timely.
How to File an Accident Insurance Claim?
To initiate the claim process, you need to inform the insurance provider within the specified time frame. You might be provided with a claim reference number. The following information is required to be submitted to the provider while intimating a claim-
- Your contact number
- Policy number
- Date and time of the accident
- Name and contact details of the insured person who is injured
- Location of the incident
- A brief description of how the accident/ loss took place with its location details
- Extent of the loss
It is essential that these details are known to the family members or dependents (including spouse) also as an unexpected event such as demise may put them in situations where they are unaware of what to do next.
In case of an Accidental death/ impairment claim, following documents are required to be submitted
- Death certificate
- Post-mortem report
- FIR report
- Medical certificate
- Medicine bills
As a necessary precaution, policyholders can ensure that these details are kept for future reference of the family members so that they are not left helpless or any advantage unclaimed in the event of an unexpected event leads to a coma or even demise
Tax Benefits Under a Personal Accident Policy
Section 80D of the Income Tax Act 1961 does not provide any tax benefit for the premium paid for personal accident insurance plans that offer protection against any physical disability, dismemberment or accidental demise. However, it is important to understand that the primary reason for buying any kind of insurance is protection and safety. Insurance decisions should never be driven by tax considerations.