Personal Accident Insurance – An ignored but vital concept in India
Sandesh Jaiman
CA Finalist
Personal finance enthusiast Building Six Sigma Finserv.
The writer can be reached at: sixsigmafinserv@gmail.com
INTRODUCTION
While dealing with cases in personal finance, we observed that people lack awareness about personal accident policy, which covers hospitalization expenses and compensates for loss of work due to temporary total disability. For example, in a sum insured for Rs. 50,00,000/-, an insured may get Rs. 50,000/- per week for up to 104 weeks for Temporary Total Disability.
An accident in a family may shatter people emotionally, physically, and financially, draining away lifelong savings. The family suffers a lot in these times of vulnerability. One’s happiness comes to a pause and he is left with shock and a financial burden.
In this case, one should go for personal accident insurance to help sail through steadily during these times. A personal accident policy is a health insurance policy that offers lump-sum compensation in one transaction to cover accidental medical expenditures. To secure one’s family’s day-to-day life routine in his absence, it is essential to get personal accident insurance. This policy is designed to offer some sort of compensation to the insured person who suffers bodily injury solely as a result of an accident that is external, violent, and visible.
WHAT IS INCLUDED IN PERSONAL ACCIDENT INSURANCE?
- Accidental Death
Fatal accidents can cause death. A personal accident policy can provide up to 100% of the sum insured, in case the insured loses his/her life in an accident. Permanent Total Disability & Temporary Total Disability
Major accidents decide fate. Personal accident policy provides benefits based on the sum insured, in case the insured is permanently disabled in an accident.Broken Bones
Movement without bones is impossible. This policy provides benefits based on the sum insured in case accidents result in broken bones.Burns
Fire can remove one’s spark. This policy provides benefits based on the sum insured, in case the insured encounters 2nd or 3rd-degree burns due to accidents while commuting in common transport carriers.Ambulance Costs
The lack of prompt assistance can be life-threatening. This policy covers transportation costs to facilitate access to the nearest hospital if the insured suffers from life-threatening injuries.Hospital Cash
Accidents can cause a cash crunch. This policy provides daily cash allowances for accidents leading to hospitalization.
WHAT DOES IT NOT COVER?
- Adventure Sports Injuries
- Self-inflicted Injuries
- War
- Participation in Defense Operations
- Venereal or Sexually Transmitted Diseases
- Treatment of Obesity or Cosmetic Surgery
WHY IS IT IMPORTANT TO BUY PERSONAL ACCIDENT INSURANCE?
Round-the-clock Coverage
This policy ensures that you are covered 24 hours, as the clock ticks into day and night.Covers Age 18-70 Years
Worldwide Coverage
This policy cuts through geographic borders and provides the insured worldwide coverage.Lifelong Renewability
This policy provides lifelong renewable policies as one’s age ticks by.
INDIAN SCENARIO
According to the report on “Road accidents in India – 2022”, a total of 4,61,312 road accidents have been reported by States and Union Territories (UTs) during the calendar year 2022. These accidents claimed 1,68,491 lives and caused injuries to 4,43,366 persons. The ratio of the number of personal accident policies issued to the number of accidents in a year is very low and alarming.
Personal accident and disability insurance are gradually becoming a very important concept of personal finance in India and the world. But it is yet to be accepted completely. In a general mentality, people think that nothing wrong and such will not happen to them. But unfortunately, when it happens, they suffer a lot.
Hence, it’s high time that major steps should be taken to increase awareness about such insurance policies that cover disability and personal accidents. Such types of policies are provided by various insurance providers in India, such as HDFC, ICICI, Niva Bupa, SBI General Insurance, etc. For more information on the same, feel free to reach out to us.
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