Crisis and disaster can affect our lives at any time and anywhere. An accident is one such nightmare that can break you emotionally, physically, and financially too. An accidental injury needs immediate medical attention and hospitalization. Even if the accident is not fatal and causes severe injuries or physical disability, it may result in a loss of income and unexpected financial loss. A personal accident insurance policy is the only way to deal with this unforeseen crisis.
A good personal accident insurance provides you a lump sum payment in the event of death and total permanent disability and partial permanent disability resulting from an accident.
Need for a Personal Accident Policy
Coverages Offered in a Personal Accident Policy
The following are the coverages offered under a personal accident policy:
Let's understand how the benefits are paid under a Personal Accident policy. The following is a specimen table of benefits on the basis of the sum insured of Rs 5 lakhs, which is the sum insured selected for the purpose of illustration:
Contingency |
Amount Paid as Compensation |
Accidental death |
100% of the capital sum insured (Rs 5 lakhs) |
Loss of 2 limbs or both eyes or one limb and one eye |
100% of capital sum insured (Rs 5 lakhs) |
Loss of one limb or one eye |
50% of capital sum insured (Rs 2.5 lakhs) |
Permanent total disablement other than the above (for eg., Paralysis) |
100% of capital sum insured (Rs 5 lakhs) |
Permanent partial disablement |
% will be paid as per the chart in the policy wordings |
Temporary total disablement |
Weekly payment of Rs. 5000 (that is, 1% of the capital sum insured) subject to a maximum limit or 100 weeks. |
Please note that the following varies depending on the insurance company you are choosing.
Additional benefits offered under the Personal Accident policy are:
How Much Personal Accident Insurance Should One Opt For
Rating Factor
In a Personal Accident policy, the premium is determined on the basis of the occupation. In general terms, exposure to accidental risk at home or at office is the same. But the risk associated with the occupation may vary depending on the nature of the job. For example, a person working as an Accountant is less exposed to the risk as compared to a civil engineer or supervisor working on site where a building is being constructed.
Occupation is classified into three groups:
Risk Group 1: Accountants, doctors, lawyers, architects, consulting engineers, teachers, bankers, persons engaged in administration functions, persons primarily engaged in the occupation of similar hazards.
Risk Group 2: Builders, contractors, and engineers engaged in superintending functions only; veterinary doctors; paid drivers of motor cars and light motor vehicles, and persons engaged in the occupation of similar hazards and not engaged in manual labour; cash-carrying employees; garage and motor mechanics; machine operators; drivers of trucks and other heavy vehicles; professional athletes and sportsmen; and so on.
Risk Group 3: Persons working underground mines, explosives, circus personnel, and persons engaged in occupations/activities of similar hazards.
Exclusions under a Personal Accident Policy
No compensation will be payable under the Personal Accident policy for the following reasons: