Why Should You Buy Personal Accident Insurance Policy?

Life is uncertain and to compensate and provide financial support during such times, a personal accident policy is a must. It provides financial support to the policyholder if he becomes disabled due to an accident. A few common insurance covers are life insurance, health insurance, and motor insurance. Very few of us are aware of personal accident insurance plans that are of great help especially at the time of emergency. In this article, we would get to know more about the policy and who are eligible for it.

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    How Personal Accident Policy is Beneficial?

    The need for a personal accident policy arises from the fact that a life insurer offers financial security only in case of death of the policyholder. Accidents however could render one disabled temporarily or permanently, resulting in loss of income, besides an additional burden of medical expenditure. A personal accident policy not only pays at the time of death, but also financially secures you and your family in the event of an accident. It curtails financial constraints that may arise due to income loss.Minor accidents like falling off a bicycle or fracturing an arm are covered by the policy.

    What does Personal Accident Policy Cover?

    A personal accident plan is equipped with the following features:

    • Accidental death benefit - In the unfortunate event of death of the policyholder, the insurer pays the entire sum insured to the nominee.
    • Permanent total disablement - In this case, a certain percentage of the sum insured will be paid to the policyholder.
    • Permanent partial disablement - In this case, a small percentage of sum assured is paid to the policyholder on a weekly or monthly basis. For instance, loss of hearing in one ear, loss of index finger/any other finger, loss of one hand, etc.
    • Temporary total disablement - The policyholder is entitled to get weekly benefits for accidents resulting in confinement up to 104 weeks. For example, fracture in hands or legs.
    • Education grant - The policy bears the education cost of maximum two dependents kids up to the age of 23 years.
    • Transportation of mortal remains - In the unfortunate event of an accidental death, the insurer pays a fixed amount towards transportation of mortal remains. 

    What is not Covered under Personal Accident Policy?

    Accidental policies do not cover disability or death due to:

    • Intentional self-injury, suicide
    • Influence of intoxicating drugs or liquor
    • Breach of law with criminal intent
    • Pre-existing disability/accidental injury
    •  Death or disablement resulting from child birth and pregnancy
    • AIDS/HIV
    • Terrorism
    You may also like to Read: Income Tax Deductions

    How is Premium Calculated?

    In case of personal accident policies, coverage and premium depends on the current level of income and nature of the applicant’s occupation. If you are a teacher living in Delhi, then your chance of meetingan accident is less than a miner. For calculating the premium, insurers have categorized occupations according to the risk level.

    Risk Level I (Low Risk)

    Risk Level II (Medium Risk)

    Risk Level III (High Risk)

    Administrative / managing functions

    Machine Operator 

    Mine workers

    Doctors

    Garage mechanic

     Jockey

    Accountants

    Manual labor

    Mountaineers

    Teachers

     Builder

    Professional river rafters

    Architects

    Veterinary Doctor

    Big game hunters

    Lawyers

    Contractor

     Circus Performers

     

    Similar term insurance, premium of a personal accident policy is also very low. For example, HDFC Ergo’s personal accident policy offering Rs 15 lakh can be bought at Rs 2359 only.

    Available Options in the Market

    Some of the popular personal accident policies available in the market are:-

    Insurance Company Personal Accident Plans Age ( in years) Coverage Amount ( in Rs) No Claim Bonus
    Aditya Birla Health Insurance Activ Assure Personal Accident Plan

    Min:5 years

    Max: 65 years

    12 times of yearly gross income N/A
    Bajaj Allianz Health Insurance Personal Guard Plan N/A 10 Lakh-25 Lakh Up to 50 %
    Bharti AXA
    Health Insurance
    Smart Individual Plan

    Min:18 years

    Max: 70 years

    Accidental Death Benefit: 2 Lakh to 20 Lakh

    Permanent Total Disability: 3 Lakh to 30 Lakh

    N/A
    Cholamandalam Health Insurance Chola Accident Protection

    Min: 18 years

    Max: 69 years

    Family:2.5 Lakh-10 lakhs

    Individual: 5 lakhs to 1 Crore

    N/A
    Future Generali Health Insurance Personal Accident Plan

    Min: 18 years

    Max: 70 years

    up to 144 times of annual income N/A
    HDFC ERGO  Health Insurance(formerly known as Apollo Munich)  Personal Accident Plan

    Min: 91 days

    Max: 69 years

    5-500 lakhs N/A
    HDFC Ergo General Insurance Personal Accident Plan

    Min: 18 years

    Max: 65 years

    2.5 -15 lakhs 5%-50%
    IFFCO Tokio Health Insurance  Personal Accident Policy

    Min: 5 years

    Max: 70 years

    100% of sum assured 5%-50%
    Kotak Health Insurance Kotak Accident Care  

    Min: 5 years

    Max: 65 years

    N/A N/A
    Liberty Health Insurance Individual Personal Accident Policy

    Min: 18 years

    Max: 70 years

    1 lakh - 1 Crore N/A
    Max Bupa Health Insurance Personal Accident Health Insurance

    Min: 18 years

    Max: 65 years

    5-25 lakhs 5%-50%
    Manipal Cigna Health Insurance Protection Accident-Care

    Min: 18 years

    Max: 80 years

    50,000- 10 Crore N/A
    National Health Insurance  Personal Accident Plan

    Min: 5 years

    Max: 70 years

    72 months gross pay or Rs.10 lakh whichever is less. 5%-50%
    New India Assurance Health Insurance Personal Accident Policy

    Min: 5 years 

    Max: 70 years

    N/A 5% -50%
    Oriental Health Insurance Janata Personal Accident Policy

    Min 10 years

    Max: 80 years

    25000-5 lakhs N/A
    Religare Health Insurance Secure Personal Accident Insurance Plan

    Min: 18 years

    Max: 70 years

    15 lakhs- 25 Crores N/A
    Raheja QBE Health Insurance Individual Personal Accident Insurance Policy As per policy document As per policy document 5% -25% of the initial sum assured
    Royal Sundaram Health Insurance Individual Personal Accident Policy (Death & Disablement Only)

    Min: 18 years

    Max: 65 years

    5 - 75 Lakh 5% for each claim free year; limited to 25% of the initial sum assured
    Reliance Health Insurance Personal Accident Group Insurance Policy

    Min 5 years

    Max: 70 years

    100% of sum insured in case of permanent total disability N/A
    Star Health Insurance Accident Care Individual Insurance Policy

    Min: 18 years

    Max: 70 years

    5 Lakh-15 Lakh 5% for each claim free year; limited to 50% of the initial sum assured
    SBI Health Insurance  Individual Personal Accident Plan

    Min: 18 years

    Max: 65 years

    1 Lakh- 10 Lakh 5%-50%
    TATA AIG Health Insurance Personal Accident Gaurd Plan

    Min: 18 years

    Max: 65 years

    1 year with lifetime renewal 5 Lakh- 1 Crore
    United India Health Insurance  Individual Personal Accident Plan 

    Min: 5 years

    Max: 70 years

    1 year 25,000-10 Lakh
    Universal Sompo Health Insurance  Individual Personal Accident Policy

    Min: 5 years

    Max: 65 years

    1 year N/A

     

    Many people avoid personal accident policies due to the absence of tax benefits. However, if your job requires constant travelling by using any mode of transport, you would be considered to be accident-prone. In this case, it is advisableto buy a personal accident policy. This policy provides complete protection against accidental risks and thus, offers financial security in the event of death or disability. The plan works well when you buy it as an individual policy or not as a rider attached with a life insurance policy.

    You may also like to Read: Section 80C

    Disclaimer : *Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

    Written By: PolicyBazaar - Updated: 29 July 2021
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    Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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