Personal Accident Insurance-The first insurance you must buy
Things to know about how to purchase and claim personal accident insurance.
- Jun 22, 2016,
- Updated Jun 22, 2016 6:08 PM IST
One person in India dies of an accident every four minutes. In the same time, almost three cases are reported of injuries due to accidentsand another 10 incidents would be unreported accidents. Indian roads are amongst the most unsafein the world, which kill more people every year, than say terrorism or cancer.
These statistics point to the fact that most of us may not be mindful of the gravity of such incidents, but cannot deny the magnitude of risk associated with an accidental disabilityand that it can be catastrophic to the financial plan of any family,even more than natural death or a hospitalization. Disability of a breadwinner would not only result in loss of earnings, but also put an additional burden on the family in terms of meeting additional needs of the disabled member such as full time attendant, special equipment, modification of home or vehicles, etc.
While there isn't any warning of when such incidents could strike, the good part is that there is a solution in the form of an insurance policy that is quickly available and can cover the risk of loss of income due to varied degrees of accidental disability anywhere across the world, at a very economical price.Personal accident policy, without a doubt should be the first insurance policy one should invest in when one reaches adulthood or/and starts venturing out alone in the big bad world.
It's a no-brainer, as at a young age when you are healthy and hearty, you are more exposed to the risk of an accident disrupting your life than anything else. As you grow older while risks do not subside, stakes grow substantially, making the cover more vital than earlier.
How does it work? You buy a personal accident insurance by choosing a lump sum coverage amount as per your eligibility, which is usually 5-8 times your annual earnings. The premiums are in the range of Rs. 100 to Rs. 200 for one lakh of coverage, depending on your occupation and what customizations you choose.
Read on to learn how it works.The personal accident insurance policy will provide the following covers:Base cover: This policy will pay a percentage (in the range of 5 to 100%) of the coverage amount depending on the degree of disability that completely or partially takes away the means of usual earning for an individual. For instance, in the case of accidental death or blindness or loss of two limbs (considered as Permanent Total Disability), a standard personal accident policy will pay 100% of the coverage.
In case one loses a single limb (grouped under Permanent Partial Disability)the policy will pay 50% of the full coverage, while, in case of loss of a finger other than thumb or index finger (grouped under Permanent Partial Disability), the policy will pay 5%. The policy material such as brochures etc. come with a chart that enlists various type of disabilities and the percentage of cover provided against each of them. The comprehensive version of the policy will also cover disabilities that lead you bed-ridden (Temporary Total Disability). For instance If you meet with an accident and fracture both your legs, a standard accident policy will pay 1% of the coverage for every week till you recover from the disability completely. Value-added covers: Apart from loss of income, looking at the un-ending periphery costs associated with an accidental disability, some insurers provide value-added covers such as cost of transportation of the body to the home/hospital or cremation/burial ground, funeral expenses, cost of X-rays and MRI, cost of modification of the house/vehicle, cost of devices like artificial arms and medical equipment like wheel chair.
Further "paid" customizations: You can build a perfect customized solution by paying for additional "toppings" as per your needs such as covering accidental hospitalization expenses, adventure sports, children education, EMI payment cover, loan protector cover, travel expenses of a family member etc.
Insurance for other members:Dependent family members: Though personal accident policies are primarily focused on covering loss of income of the breadwinner, there are still losses of financial value as well as additional expenses incurred due to disability of dependent family members. Insurers provide cover, though a restricted one (as a percentage of your cover) to cover family members. This is usually 50% of the sum insured for dependent spouse and 25% for dependent children. Older parents can be covered under the same logic or based on any regular earnings they may have.
Home and office help:This is an oft-neglectedconstituency you must consider taking care of. Personal accident covers are absolutely necessary for all your fulltime help/staff at work and at office. Besides you taking care of their finances with an affordable cost efficient tool, you are also protecting yourself from financial liability that may arise if the accident has occurred in your premises or whilst traveling to or from your office or home. In our experience we have seen that a comprehensive policy with an additional hospitalization expense rider is most apt for home and office help.
How to buy personal accident insurance? Need analysis: You need to first jot down the risks and needs you want to cover. With or without professional assistance of an intermediary you need to research first and compare latest personal accident products in the market to find the closest match to your needs. For instance, in case you have loans, it would be beneficial to buy a policy that provides loan protector cover.Insurance purchases mostly being single lifetime purchases,and therefore without significantly delaying the action, it is important you do a thorough due diligence before you jump in. Rider vs.standalone cover:There are also riders available in existing life insurance policies. While it is convenient to have one policy to administer year on year, riders are not comprehensive solutions to cover all types of disabilities. It is always recommended to makesome effort and go for a comprehensive standalone policy. Know the limitations of cover: You must make yourself aware of the limitations in the policy by reading the policy wordings carefully.
Some of the exclusions are as follows:
- Pre-existing injuries.
- Self-inflicted injuries and injuries by self, due to a mental disorder like depression, stress, anxiety or depression, or due to influence of alcohol or drugs.
- Injuries caused due to participation in adventure sports, unless covered specifically.
- Infections other than pus infections due to accidental injury.
How to claim it?In case of an accident, the process is extremely simple and straightforward, and mentioned in detail in the policy wordings.Here's the standard process you can expect: 1.You or someone claiming on your behalf needs to notify the insurance company immediately or maximum within stipulated time mentioned in the policy document. 2.In case of disability, you must consult a doctor and take reasonable steps to control further impairment. 3.Submit papers as mentioned in the policy wordings within a stipulated time after intimation.
For instance for Permanent Total Disability or Death, the papers generally required are:a. Completed Claim Form with signatures from the insured or the assignee/legal heir. b. Death or Disability Certificate from a doctor or as specified in the policy c. Investigation reports that support the disability. d. Attested copy of FIR. e. Attested copy of Post mortem report, if applicable.
Once the documentation is complete, and the insurance company is satisfied with the representations, the insurance company will in case of Permanent Disability or Death, will pay the assignee(s) mentioned in the proposal form. In case assignees are missing, the payment would be made to the nominee. In absence of both the assignee and nominee, the payment will be made to the legal heir.
In case of Temporary Total Disability, the payment of the claim would be made once the insured member has recovered or when the disability reaches its maximum term as per the policy (generally 100 weeks). Given the emotional, physical and mental trauma for the person concerned and loved ones at the time of an accident, having a personal accident insurance alleviates some of this stress by providing the necessary material support.
By Mahavir Chopra, Director - Health, Life and Strategic Initiatives, Coverfox.com
One person in India dies of an accident every four minutes. In the same time, almost three cases are reported of injuries due to accidentsand another 10 incidents would be unreported accidents. Indian roads are amongst the most unsafein the world, which kill more people every year, than say terrorism or cancer.
These statistics point to the fact that most of us may not be mindful of the gravity of such incidents, but cannot deny the magnitude of risk associated with an accidental disabilityand that it can be catastrophic to the financial plan of any family,even more than natural death or a hospitalization. Disability of a breadwinner would not only result in loss of earnings, but also put an additional burden on the family in terms of meeting additional needs of the disabled member such as full time attendant, special equipment, modification of home or vehicles, etc.
While there isn't any warning of when such incidents could strike, the good part is that there is a solution in the form of an insurance policy that is quickly available and can cover the risk of loss of income due to varied degrees of accidental disability anywhere across the world, at a very economical price.Personal accident policy, without a doubt should be the first insurance policy one should invest in when one reaches adulthood or/and starts venturing out alone in the big bad world.
It's a no-brainer, as at a young age when you are healthy and hearty, you are more exposed to the risk of an accident disrupting your life than anything else. As you grow older while risks do not subside, stakes grow substantially, making the cover more vital than earlier.
How does it work? You buy a personal accident insurance by choosing a lump sum coverage amount as per your eligibility, which is usually 5-8 times your annual earnings. The premiums are in the range of Rs. 100 to Rs. 200 for one lakh of coverage, depending on your occupation and what customizations you choose.
Read on to learn how it works.The personal accident insurance policy will provide the following covers:Base cover: This policy will pay a percentage (in the range of 5 to 100%) of the coverage amount depending on the degree of disability that completely or partially takes away the means of usual earning for an individual. For instance, in the case of accidental death or blindness or loss of two limbs (considered as Permanent Total Disability), a standard personal accident policy will pay 100% of the coverage.
In case one loses a single limb (grouped under Permanent Partial Disability)the policy will pay 50% of the full coverage, while, in case of loss of a finger other than thumb or index finger (grouped under Permanent Partial Disability), the policy will pay 5%. The policy material such as brochures etc. come with a chart that enlists various type of disabilities and the percentage of cover provided against each of them. The comprehensive version of the policy will also cover disabilities that lead you bed-ridden (Temporary Total Disability). For instance If you meet with an accident and fracture both your legs, a standard accident policy will pay 1% of the coverage for every week till you recover from the disability completely. Value-added covers: Apart from loss of income, looking at the un-ending periphery costs associated with an accidental disability, some insurers provide value-added covers such as cost of transportation of the body to the home/hospital or cremation/burial ground, funeral expenses, cost of X-rays and MRI, cost of modification of the house/vehicle, cost of devices like artificial arms and medical equipment like wheel chair.
Further "paid" customizations: You can build a perfect customized solution by paying for additional "toppings" as per your needs such as covering accidental hospitalization expenses, adventure sports, children education, EMI payment cover, loan protector cover, travel expenses of a family member etc.
Insurance for other members:Dependent family members: Though personal accident policies are primarily focused on covering loss of income of the breadwinner, there are still losses of financial value as well as additional expenses incurred due to disability of dependent family members. Insurers provide cover, though a restricted one (as a percentage of your cover) to cover family members. This is usually 50% of the sum insured for dependent spouse and 25% for dependent children. Older parents can be covered under the same logic or based on any regular earnings they may have.
Home and office help:This is an oft-neglectedconstituency you must consider taking care of. Personal accident covers are absolutely necessary for all your fulltime help/staff at work and at office. Besides you taking care of their finances with an affordable cost efficient tool, you are also protecting yourself from financial liability that may arise if the accident has occurred in your premises or whilst traveling to or from your office or home. In our experience we have seen that a comprehensive policy with an additional hospitalization expense rider is most apt for home and office help.
How to buy personal accident insurance? Need analysis: You need to first jot down the risks and needs you want to cover. With or without professional assistance of an intermediary you need to research first and compare latest personal accident products in the market to find the closest match to your needs. For instance, in case you have loans, it would be beneficial to buy a policy that provides loan protector cover.Insurance purchases mostly being single lifetime purchases,and therefore without significantly delaying the action, it is important you do a thorough due diligence before you jump in. Rider vs.standalone cover:There are also riders available in existing life insurance policies. While it is convenient to have one policy to administer year on year, riders are not comprehensive solutions to cover all types of disabilities. It is always recommended to makesome effort and go for a comprehensive standalone policy. Know the limitations of cover: You must make yourself aware of the limitations in the policy by reading the policy wordings carefully.
Some of the exclusions are as follows:
- Pre-existing injuries.
- Self-inflicted injuries and injuries by self, due to a mental disorder like depression, stress, anxiety or depression, or due to influence of alcohol or drugs.
- Injuries caused due to participation in adventure sports, unless covered specifically.
- Infections other than pus infections due to accidental injury.
How to claim it?In case of an accident, the process is extremely simple and straightforward, and mentioned in detail in the policy wordings.Here's the standard process you can expect: 1.You or someone claiming on your behalf needs to notify the insurance company immediately or maximum within stipulated time mentioned in the policy document. 2.In case of disability, you must consult a doctor and take reasonable steps to control further impairment. 3.Submit papers as mentioned in the policy wordings within a stipulated time after intimation.
For instance for Permanent Total Disability or Death, the papers generally required are:a. Completed Claim Form with signatures from the insured or the assignee/legal heir. b. Death or Disability Certificate from a doctor or as specified in the policy c. Investigation reports that support the disability. d. Attested copy of FIR. e. Attested copy of Post mortem report, if applicable.
Once the documentation is complete, and the insurance company is satisfied with the representations, the insurance company will in case of Permanent Disability or Death, will pay the assignee(s) mentioned in the proposal form. In case assignees are missing, the payment would be made to the nominee. In absence of both the assignee and nominee, the payment will be made to the legal heir.
In case of Temporary Total Disability, the payment of the claim would be made once the insured member has recovered or when the disability reaches its maximum term as per the policy (generally 100 weeks). Given the emotional, physical and mental trauma for the person concerned and loved ones at the time of an accident, having a personal accident insurance alleviates some of this stress by providing the necessary material support.
By Mahavir Chopra, Director - Health, Life and Strategic Initiatives, Coverfox.com