What is Personal Accident Insurance Policy? Types & Coverage

Given the unpredictable and vulnerable nature of life, it is crucial for a person, especially the prime earners of the family, to adequately insure themselves. A great protective step is to opt for a personal accident insurance scheme , given the increasing number of accidents in the country.Here is all you need to understand about this secure scheme:

A personal accident insurance scheme is a very cost-effective cover which provides coverage for accidental death, permanent total disability, permanent partial disability, as well as a temporary disability. The policy aims to provide for the policyholder and the family in case of permanent loss or a temporary reduction in income due to an accident.The scheme also covers hospital bills and other medical expenses incurred in an accident. It is a great way to assure the security of the family in case of untimely demise or disability. There is no need for a medical test, the documentation is very simple, and the claim settlement is also fairly simple.

A personal accident policy provides coverage for accidental death, permanent total disability, permanent partial disability, as well as a temporary disability. A comprehensive policy also extends to cover the medical and hospital bills, including ambulance, treatment, loss of eyesight, fractures, burns, cuts, etc.In case of death and permanent disability , the policy pays the entire sum assured. While for permanent partial disability and temporary total disability, the cover offers a certain percentage of the sum and weekly compensation, respectively. The compensation is dependent on the sum assured the severity of the problem, as well as the income and profession of the policyholder.

These policies do not provide any tax benefits since their sole purpose is to compensate for injuries or death resulting from an accident.

A personal accident insurance scheme is usually a bundle offer with life insurance policies or credit card offers. However, at the time of motor insurance , a personal accident cover is compulsory. Most companies offer only the basic coverage of permanent disability and death, provided the accident happens when the policyholder is in the vehicle. There are, however, other extensive covers which include partial disabilities and can cover families on the entire family.

Overall, a personal accident insurance policy is more directed and covers the limitations of both life insurance and a health plan. The importance of the cover cannot be debated.

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.