Vaid, a software engineer, the only breadwinner of his family met with an accident on his way back home from office. He suffered multiple injuries and lost his ability to walk in the accident. He required several months to recuperate and had to take a break from work during these months. While his health insurance policy will take care of the hospital bills, what about the loss of income?
Thinking about Vaid’s situation gives you the chills, isn’t it? That is why there is something called a personal accident cover.
What is personal accident cover?
A personal accident insurance policy covers the policyholder against death, permanent or temporary disability (both total and partial disability) as a result of an accident. This policy acts as a monetary reimbursement in case of death, injuries or disability caused due to an accident.
Accidents are unpredictable and can happen to anyone at any time. During these unfortunate situations, buying a personal accident insurance cover has become a necessity.
Why do you need a Personal Accident Cover?
Most of the general public would think that buying a personal accident cover is not really important or at least not needed at the moment. The other factors affecting this decision are
- This cover holds no tax benefits making the customers likely less interested in it.
- It has significantly lower premiums and commission payable which makes it less attractive for the agents to sell it aggressively.
- This type of policy is only issued on a yearly basis which is a pain. Most people often miss out on renewing their policies making them highly prone to losing their benefits.
But a personal accident cover can come in as a lifesaver during unfortunate situations. In the example above, if Vaid had personal accident cover, the money received from the policy could have been used as income replacement to meet Vaid’s personal expenses and the needs of his family, while he was hurt and recuperating at home.
That is why financial literacy is important. The more you know about various financial products, the better are your decisions. This is why CreditMantri strives to educate the general public about financial wellness. And this article is one way of doing so.
Factors to Consider while Choosing Personal Accident Insurance
If you are looking for a personal accident cover then there are some things you should keep in mind before you get one.
- Type of plan
When it comes to types of personal accident insurance, the choices are just two. You can either buy a family personal accident cover or go for an individual cover, whichever suits you best. When you opt for a family personal accident cover then just make sure that the policy covers all your family members against the unfortunate possibility of accident.
- Premium
Premium is generally a term used to describe an amount which is to be paid regularly to the insurer to maintain the terms of the insurance coverage. Choose for policies which offer you an affordable premium and within your budget while reflecting the coverage of the policy. The policies should have a balance between the premium charged and coverage extended.
- Benefits
Permanent complete disability, permanent partial disability, and accidental death benefit are some of the inbuilt benefits in some policies. However, make sure that the plan also provides for ambulance costs and hospital expenses.
- Policy coverage
The policy should provide extensive coverage with the aim of more protection for the insured. That said, the coverage should include all the required activities which may lead to accidents at various workplaces such as home or office.
- Insurer
When you choose a insurer make sure they are a reputed insurance company. Why we say that is because a company’s track record of claim settlement speaks volumes about their quality and reliability.
- Benefits to family
Most plans provide some benefits to your family when an accident occurs and results in permanent disability or probable death. So if the compensation includes benefits for your family, better off your family will be.
- Ease of Claim settlement process
Ask your insurer to describe the claim settlement process to ensure that it is hassle free and quick. Keep documentation ready such as claim form, medical certificates, a copy of the FIR, etc. These are essential while registering the claim. Know about the involvement of the Third Party Administrator (TPA) and its claim history.
- Coverage Abroad
Accidents can happen even while you are travelling abroad. It is advised to get personal accident cover that includes coverage when you are far from your homeland.
- Exclusions
Certain events are excluded from the policy coverage and must be paid attention to as at the time of taking a decision for the purchase of the policy. If you feel that the excluded events are more likely to happen then there is no use of a personal accident cover.
Key Takeaways
Let us look into the highlights of a personal accident cover for a better understanding
- Through this policy the policyholder will be compensated in case of disability or death due to an accident.
- The main aim of this policy is to provide monetary reimbursement in case of death, injuries or disability caused due to an accident.
- It covers temporary disability such as fractures or muscle or ligament tear etc and permanent disability such as paralysis of any kind.
- The premium will be calculated and coverage will be applied only to the extent of risk involved in the workplace or a person’s everyday activities. A personal accident cover can also be purchased along with your primary life insurance plan as an add-on cover.
- Only accidents are covered under this policy and not death due to natural circumstances even if they were linked to the nature of the job.
Conclusion
To sum it all up, a personal accident insurance policy covers the policyholder against death, permanent or temporary disability no matter whether its total or partial as a result of an accident. This policy acts as a monetary reimbursement in case of death, injuries or disability caused due to an accident.
Measure your risks and opt for the cover best suited for your needs. Although there are a variety of policies out there in the market today, a personal accident cover stands out because of its income and disability coverage that it offers to its policyholders in the event of an accident. Compare the prices of the best personal insurance plans at CreditMantri and get the best policy that meets your needs.