Personal Accident Insurance

Accidents can strain your emotional and physical well-being and financial health. Personal accidental insurance is one way to protect yourself and your family from the financial stress during this time. 

With affordable premiums, this is the right way to secure your family’s financial future. Knowing its benefits and differences from other insurance options allows you to choose wisely.

According to the World Economic Forum report, India had the highest number of road accidents in 2021, with 250,000 deaths in a year. Out of this, the highest number of casualties are two-wheeler drivers. Car drivers and pedestrians hold the second position, as per National Crime Records Bureau research. 

In every 264.7 out of 10,000 cases, the person has to be hospitalised for an average of 8.77 days, as per the National Sample Survey (NSS) study. This study also shows that such accidents can cost you 10% of your annual household income in out-of-pocket expenditures.

Personal accident insurance is broadly divided into two categories:

• Individual Accident Insurance:

This type of insurance covers accidental demise, loss of limb or sight, and other disabilities of an individual.

• Group Accident Insurance:

In most cases, employers get this insurance to protect their employees against any accidents.

Here are the different types of coverage you can get with personal accidental insurance.

• Accidental Death Cover

In case of untimely demise, the insurer will pay the sum insured or the amount mentioned in the policy to the nominee or family member.

• Permanent/Total Disability Cover

If the accident results in permanent or total disability, the insurer will pay out a part of the sum insured, as agreed upon.

• Permanent Partial Disability Cover

If you suffer partial permanent disabilities that affect skills and productivity, you get a percentage of the insured sum, which can be up to 100%. 

• Temporary Total Disability

If the accident results in complete disability for a temporary period, you can get a weekly allowance. This can help you cover the loss of income and manage your expenses, such as medical bills and EMI.

Getting this insurance protects you from an unexpected financial burden with comprehensive coverage. The dependent family members get the required financial aid in case of the untimely demise of the insured individual. 

If the face disability or life support, personal accidental insurance can cover its cost as well as compensation for the loss of income. This way, you and your family can avoid the additional financial stress during an emergency or unfortunate time.

Here are other benefits of getting accidental insurance for yourself or your employees:

• It covers most of the disabilities and injuries

• You can customise the insurance plan with an add-on to meet all your financial requirements

• It also covers the cost of dependent children's education 

• They have affordable premiums that you can easily fit into your budget

• You can enjoy worldwide coverage for better security 

• There is no waiting period 

• You do not have to go through a medical test to make a claim

• You can also receive monthly or weekly allowance for a specified period 

• You do not have to worry about loans and EMIs while being injured 

• It also covers the cost of transportation for the family members 

While both provide death benefits to the insured's family, they have different criteria. Life insurance policy covers all types of natural deaths. Personal accidental insurance covers untimely demise due to accident, disability and injury. 

Here is a detailed overview of the difference between these two policies.

These two policies cover different aspects of health and financial concerns. Accidental insurance does not cover any pre-existing conditions, but only incidental injury. Critical illness covers insured individuals' financial requirements after the diagnosis of critical illness.

Term insurance covers all natural deaths, but accidental insurance only covers deaths due to an accident. Another difference is that term policies are not liable to cover medical expenses.

The premium for your insurance is subject to many factors:

• If you have a high insured amount, your premium will also be high

• Elderly people have a higher premium as they are at higher risk of accidents 

• If you are employed at a high-risk job, then your premium will be higher 

• Your health condition and medical history also play a critical role in deciding your insurance premium 

• If you opt for add ones to enhance the coverage, your insurance premium will also increase

Your personal accidental insurance plan should be at least 10 times your annual income or 100 times your monthly income. Say you earn ₹1 Lakh per month or have an annual income of ₹12 Lakhs. 

In such a case, your insurance premium should be between ₹1.20 Crores and ₹1 Crore. 

Other factors that you should consider when choosing the payout amount are:

• Debts and loans

• Age 

• Number of dependents

• Inflation 

• Premium amount and affordability

• Future financial goals

Here are the steps you can follow to file a personal accidental insurance claim:

1. Inform the insurance company of the incident within the stipulated period

2. Get the claim form and fill it with accurate details 

3. Submit the form with the required documents 

4. Provide other documents relevant to the claim

5. Wait for the approval 

If approved, the amount will get transferred into your account promptly. In case of a query, a representative will reach out and clear any concerns.

Here is the list of documents required for an accidental death or impairment claim: 

• Duly filled claim form 

• Death certificate 

• Medical bills and investigation report

• Medical certificate 

• FIR copy 

• Doctors report 

• Discharge proof 

• Postmortem report

Under section 80D of the Income Tax Act, you can claim deductions on your policy premium. If you are a regular citizen, you can claim a deduction up to ₹25,000, which is extended to ₹50,000 for senior citizens. 

If there is a separate policy for senior citizens, you can claim a deduction of ₹75,000. If both the policyholder and the person paying the premium are senior citizens, the limit increases to ₹1 Lakh.