It’s a fact that to cover the risk of death we have life insurance policy and to take care of the hospitalization expenses there is health insurance policy. Nearly all of us are familiar with these two types of policies. Have you thought what would happen when you meet with an accident? Accidents could even wipe out your savings and cause disability that prevents job performance and employment. It’s true that some of the health and life insurance policies offer accidental riders. But do they offer comprehensive coverage for permanent and temporary disabilities? You cannot afford to be complacent as not taking a personal accident cover is a big risk by itself.
Why the need for a personal accident cover
Let’s take this scenario into consideration. Manish works as a project manager for a reputed software firm in the silicon valley of India. His family consists of his wife, two young kids and his aged mother. Recently, he purchased a new house through housing loan. He is also investing for his children’s education.
It was a last working day before the Diwali holidays. He is expected at home early because he is expecting a few guests. The traffic is heavy with Diwali shoppers. Though he is a cautious driver, on that fateful day, while taking a U-turn, another car, coming at a great speed, dashed into his car from the other side. It was a serious accident. Manish lost the movement of his right hand and right leg. He was in coma for a couple of weeks. This incident changed his whole life. Since he could not get back to work, his income stopped coming in. But his expense at his house which include the EMIs of the house and other loans he had taken have to continue.
The term policy which he had taken will not pay him because he is not dead. The health policy plan he had, paid for his hospitalization and other basic medical needs. If only he had an accident cover in place, it would have helped at a time like this. Given below are some of the things that are covered when you take a personal accident policy.
- A basic plan provides for both death and disability caused by an accident. You have the option of further enhancing the cover.
- The policy is applicable for all types of accidents including both major and minor.
- The premium of a personal accident plan is pretty inexpensive. Typically, it will cost 0.1% of the desired coverage. There is provision of loss of livelihood due to accident too.
What is personal accident cover
An accident cover is an insurance policy that offers coverage to the insured at the time of injury or death caused by an accident. Also the payouts depend on the severity of the injuries. If the insurer dies in the accident, his nominee will get 100% of the assured sum.
Also note that age is not a factor to qualify for a personal accident cover. Generally, no health check-up is mandatory. Also the most of the accident policies offer worldwide coverage.
Types of accident cover
- Group accident cover – This cover is offered by your employer. Here you may not get the benefits you are looking out for.
- Personal accident cover- Here you can take policy as per your requirements from a reputed insurance company.
What accident policies don’t cover
In certain circumstances accidental policies do not offer coverage. These include the following
- Self-injury by intent, suicide or attempt to commit suicide.
- Death or disability arising due to criminal activity.
- Accidents caused due to negligence
- Natural disasters like earthquake, flood, landslide and many more
- Illness due to any pre-existing medical conditions.
- Coverage is not offered to those who are engaged in hazardous occupations.
Compensations for different situations
To make it clearer we have put together a comprehensive list of different disability conditions.
Permanent Total Disablement- In the event of a permanent total disability where a person is rendered disabled for life, the person is awarded the total sum assured. For instance, loss of both or one of the limbs, eye sight, speech and hearing.
Permanent Partial Disablement- A minor percentage of the sum assured is released on weekly or monthly basis till the cumulative amount is equal to the total sum assured. Permanent partial disablement include loss of hearing in one ear, loss of sight in one of the eyes, loss of one limb and loss of thumb or index finger.
Temporary Total Disablement- Here the disability is limited to a few weeks a month wherein you are not able to work to earn money. In these kinds of cases most insurance firms pay only a part of the total some assured. There is also a ceiling on the maximum amount disbursed.
Accident policy will go a long way in ensuring peace of mind and giving a sense of security. Compare different policies and choose the better one and the one which is suited to your unique situation. It is advisable that you take a personal policy in order to safeguard yourselves and family’s future.