What is a personal accident plan?As the name suggests, a personal accident plan offers a financial cushion in the event of an accident. According to latest date from the Ministry of Road Transport and Highways, as many as 17  people die in road accidents in India every hour on an average, with 27%  resulting in grievous injury. Such injuries can impair your ability to earn, putting a brake on active income.
This is where a personal accident cover comes to your rescue as it covers loss of income because of disability, temporary or permanent, arising due to accident. You will receive pay-outs as per the policy’s terms and conditions, which can help your family meet day-to-day expenses and address essential commitments such as paying utility bills, EMIs, school fees, etc.
Plugging a big holeA personal accident plan, thus, plugs a big hole in your insurance portfolio. Note that a life insurance plan protects income only in case of death. Though you can add personal accident rider in your existing life insurance policy, the coverage may not be comprehensive.
On the other hand, health insurance policies will reimburse hospitalisation expenses but will not offer any pay-out in case you are rendered jobless or unable to go to work due to accident.
Also, note that new-age personal accident plans also provide coverage for minor accidents such as falling off from bicycle and breaking an arm or fracturing leg while playing soccer. You can get an extensive coverage at a nominal premium. The pay-out structure differs across policies, and some plans offer a daily allowance, similar to a hospital cash cover.
In conclusionAs evident, a personal accident plan is a must buy given the high rates of accidents prevalent in India. The pay-out received from it can not only help your stay financially independent in the event of a mishap but also replaces your lost income, thus preventing a dip in savings and impinging on essential financial goals.
Learn more about Health Insurance Plans here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.