Personal Accident Insurance

Accidents could happen to even to the most cautious of people and will usually have a large impact on our day-to-day lives. While even minor accidents may render us incapable of working and cause us significant medical expenses, major accidents will completely alter the course of our lives. Major accidents could result in death, total permanent disability, temporary disability for a period of time, etc. Added to the hospitalization and medical expenses caused by accidents, one’s family might also be left in the lurch due to the absence of adequate funds. 

Considering this, it is imperative for people to purchase a personal accident insurance plan, even if one is already covered by a comprehensive life insurance policy. If you meet with an untimely accident when you are covered under a personal accident plan, you or your nominee will be entitled to receive a payout from the insurer, which could in-turn help you meet your immediate expenses, pay off any outstanding debts or liabilities, or meet the long-term financial needs of your family. Given the amount of choice prospective policy buyers have while purchasing these plans, you can opt for a plan that perfectly covers your needs with an optimum sum insured amount and affordable premium payments. 

What is a Personal Accident Health Insurance Policy? 

A personal accident health insurance policy provides coverage for expenses incurred on the medical treatments taken for a disability caused by an accident. Alternatively, the policy also provides a benefit amount if the insured individual passes away due to an accident. 

Here are the types of benefits most insurers provide under a personal accident health insurance policy: 

• Accidental death: The nominee will be given a predetermined benefit amount in case the insured individual expires due to an accident. 
• Permanent partial disability: In case an insured person is partially disabled i.e. if he/she lost an index finger, a thumb, an ear, an eye, etc. due to an accident, a certain amount, as promised by the insurance company, is provided to him/her. 
• Permanent total disability: A permanent total disability could mean the loss of both ears, both eyes, one limb, and so on. If an accident leads to the permanent total disability of the insured, he/she is given a benefit amount as mentioned in the policy. 

Additional Benefits of Personal Accident Health Insurance Policy 

While the above-mentioned benefits are the key benefits provided by most health insurance companies under a personal accident plan, here are a few additional benefits that insurers may offer: 

• Funeral expenses: This will come into effect if the insured person passes away due to an accident. In this case, the funeral expenses of a certain range will be reimbursed to the insured’s family. 
• Temporary total disability: If the insured person suffers from a total disability for a temporary period, a certain benefit amount is paid to the person. 
• Child education benefit: In case the insured individual is permanently disabled or has passed away, a fixed amount is provided on a regular basis to help fund his/her child’s education. 
• Accident hospitalisation: A few insurance companies cover the hospitalisation expenses incurred by the policyholder when he/she is hospitalised due to an accident. 

Personal accident policies, like regular health insurance policies, have exclusions too. A disability caused by voluntary participation in dangerous activities, self-harm, mental instability, pre-existing diseases, etc. are not covered under the policy. 

Types of Personal Accident Insurance Policies 

There are 2 types of personal accident insurance policies customers can purchase:  

• Individual Accident Insurance Policy 

This policy offers financial protection if the policyholder dies, is injured, or temporarily or permanently disabled following an accident. In the case of unforeseen death of the policyholder, a lump sum payout is made to the dependents. 

• Group Accident Insurance Policy 

A Group Accident Insurance Policy is typically availed by an employer of an organisation to offer financial security to the dependents of the employee following an accident. The Group Accident Insurance policy also offers financial coverage to the dependents if the employee i.e the insured person dies following an accident, suffers from bodily injury, or temporary or permanent disability. 

How Personal Accident Insurance Plans work 

While purchasing personal accident insurance plans, you will need to choose a preferred sum insured amount. Make sure to choose a sum insured that’s large enough to cover all your liabilities and the future needs of the family, should anything happen to you. You will also have to ensure that you pay the due premiums towards the policy, before the end of the grace period. 

If you meet with an accident, which causes disability or dismemberment, while being covered by the policy, the first step is to notify the insurer of the accident and of the subsequent hospitalisation. Secondly, you will have to file a complaint with the police (if it was a road accident or caused due to a criminal act). Next, you will have to submit the claim form and all relevant documents related to the accident and the hospitalisation, to your insurer. 

If the policyholder meets with an untimely death due to the accident, the nominee or the legal heir should inform the insurer of the event and should submit the claim form, the death certificate, police report, etc. to the insurer. The insurer will begin the claim settlement process as soon as they receive all due documents. Personal accident claims are usually settled at a faster pace. 

Why you should buy a Personal Accident Insurance Plan 

• Added financial security: In case the policyholder meets with an untimely death or suffers from severe injuries due to the accident, the insurer will be liable to pay the insured or the nominee a lump sum amount, which can be used to meet hospitalisation expenses or to meet the financial needs of the insured and his/her family. 
• Available on an individual or family floater basis: Personal accident insurance plans can be bought for a single individual or for one’s entire family. If you purchase the plan on an individual basis, the sum insured will have to be utilized only by you. Family floater policies will usually cover the proposer, the spouse, dependent children, and dependent parents. In case you purchase a family floater policy, the sum insured will be available to the whole family. 
• Quick claims settlement: Most insurers will settle the claim within a few days of receiving the claim form along with all due reports and forms. The claim settlement process is efficient and hassle-free. 
• Added benefits: Most personal accident policies provide the policyholder’s family a range of additional benefits, such as an educational benefit for children of the insured member, daily cash allowance when the insured is hospitalised, reimbursement of ambulance charge and transport of mortal remains, a loss of employment benefit, cumulative bonus, no-claim bonus/discount, etc. 

Features of Personal Accident Insurance Plans 

• Most personal accident policies provide a worldwide accident cover to members. Thus, you can ensure that you will be covered even when you travel abroad. 
• You can adjust the sum insured, as per your needs. A higher sum insured will result in a higher coverage and a higher premium payment, and vice versa. 
• Most personal accident plans also provide the insured a daily hospitalisation allowance. 
• Health check-ups are not a prerequisite for most personal accident policies. 
• Your family will be safeguarded from financial hardships, even if something happens to you. 
• Claims will be settled in a hassle-free and time-efficient manner. 
• In most cases, you can choose between opting for a basic cover or a more comprehensive cover by paying an additional fee. 

Exclusions under Personal Accident Insurance Plans 

The general exclusions that apply to most personal accident insurance policies are listed below: 

• Death occurring due to natural circumstances 
• Claims that exceed the sum insured amount 
• Death or hospitalisation expenses that arise due to suicide, attempted suicide, or self-inflicted injuries 
• Hospitalisation due to pregnancy or labour 
• Hospitalisation expenses or death caused due to HIV/AIDS or any STD 
• Accidents occurring while the insured is under the influence of alcohol, drugs, or any other intoxicating substance 
• Hospitalisation due to a criminal act 
• The insured claiming more than one benefit for the same period of hospitalisation 
• Accidents occurred while partaking in extreme sports.  

What you need to consider when buying a Personal Accident Insurance  

Customers buying a Personal Accident Cover online should keep the following points in mind:  

• The customer should ensure that the policy includes financial benefits such as the accidental death benefit, the total and partial permanent disability cover, and the temporary disability Cover.  
• Make a comparison of the premium cost offered by various insurers. Choose a policy offering with the best benefits at a reasonable cost.  
• Ensure that the financial coverage for your family is sufficient.  
• The reputation of the insurer should be taken into consideration. Cross check the claim settlement ratio and the incurred claim ratio of the insurer.  
• If the policy offers coverage abroad.  
• The exclusions of the policy and what it does not cover.  

Personal Accident Insurance Claim Settlement Process 

Personal Accident Insurance policyholders have to follow the steps mentioned below to raise a claim:  

• Following the accident, intimate the insurer. The policyholder or an accompanying person should know the policy ID to begin the claim settlement process.  
• If the accident has resulted in hospitalisation, inform the insurer and raise a cashless claim if treatment is undertaken at a network hospital.  
• Submit all the relevant documents requested by the insurer including a police FIR. 
• Ensure the claim forms are self-attested by the insured person.  
• Following verification of the submitted claim forms and documents, the insurer will carry out the verification process.  
• The policyholder will be intimated by the insurer on the approval of the claim via his/her registered mobile number, email ID, etc. Policyholders can also choose to track the claim status on the website of the insurer.  

How to calculate the premium of the Personal Accident Insurance 

Customers can calculate the premium of the Personal Accident Insurance on the website of the insurer using the premium calculator. The customer will have to enter key details such as the sum assured or coverage he/she wishes for, age, profession, etc. The premium calculator will assess all the details that have been entered and display the possible premium amount of the Personal Accident Insurance.  

Top 10 Personal Accident Insurance Plans available in India 

Apollo Munich Personal Accident Premium Plan 

The Personal Accident Premium Plan from Apollo Munich offers financial security to the policyholder’s family, if the insured meets with an accidental death or suffers from injuries due to the accident. The entry age for this policy is 91 days and the maximum age at entry can be 69 years. While the maximum sum insured for individuals below the age of 69 years is Rs.5 crore, if one is renewing the policy after 70 years, the maximum sum insured is capped at Rs.5 lakh. The plan can be purchased on an individual basis, or for the proposer’s family, i.e., the proposer’s spouse, dependent parents and children. The cover can come in handy if the insured suffers from accidental death, permanent disablement, broken bones, etc. 

Apollo Munich Personal Accident Standard Plan 

This plan offers many benefits, including a lump sum payout if the insured meets with an accidental death, permanent (total/partial) disablement, incurs medical expenses as a result of the accident, total temporary disablement, etc. Further, this policy also provides an education benefit to the policyholder’s children, if they meet with a serious accident. This is a renewable annual policy. The minimum and maximum age at entry is restricted to 91 days and 69 years, respectively. The cover can be bought on an individual basis or on a floater basis, where the policy can be extended to the proposer’s spouse, dependent children and dependent parents. 

ICICI Lombard Personal Accident Policy 

The Personal Accident Policy from ICICI Lombard is an individual plan, which offers a cover against death caused due to accident and total permanent disablement. Further, the policyholder can purchase an additional cover to receive a reimbursement for hospitalisation expenses and receive a daily cash allowance for every day that the insured is hospitalised. The policy can also be purchased for one’s family members, separately. Policy buyers can choose a policy tenure of 1 year, 3 years, or 5 years, and can renew this policy for life. A sum insured of Rs.3 lakh, Rs.5 lakh, Rs.10 lakh, Rs.15 lakh, Rs.20 lakh, or Rs.25 lakh can be opted for. 

HDFC ERGO Personal Accident Insurance Policy 

This policy provides financial security in case the policyholder meets with an accident that causes death, total/permanent disability, severe burns, or broken bones. The policy also covers ambulance charges. The minimum sum insured is Rs.2.5 lakh and the maximum sum insured is Rs.15 lakh. The policy can be purchased by any individual under the age of 65 years. The key benefit of this plan is that the policy benefits and cover will apply to you even when you are travelling abroad. 

IFFCO-Tokio Individual Accident Insurance Policy 

The Individual Accident Insurance Policy from IFFCO-Tokio provides the policyholder or the nominee a range of benefits, including an education benefit, an employment benefit, a cumulative benefit, and an ambulance benefit if the policyholder were to meet with an accident that causes untimely death, loss of eyesight and/or limbs, or permanent/temporary disability. The plan can be purchased on an individual basis or on a family floater basis. The minimum and maximum age of entry for this policy are 5 years and 70 years, respectively. 

Reliance Personal Accident Plan 

The Reliance Personal Accident Plan is available as an individual plan or as a family floater plan. While the minimum age of entry for adults is 18 years, children as young as 5 years can be enrolled under the policy. Apart from the accident-related risks that are covered, the policy also offers benefits, such as an education fund for children of the insured, reimbursement of any medical expenses (provided an additional premium is paid), and reimbursement of expenses incurred for the transportation of the mortal remains. This policy provides worldwide coverage to the policy members. 

Royal Sundaram Individual Personal Accident Policy 

This policy offers a risk cover against accidental death, permanent total disability, total partial disability, temporary partial disability, and accidental hospitalisation. The policy also provides additional benefits, such as reimbursing the expenses caused while transporting the mortal remains, and an education benefit for the children of the insured. The policy can be purchased for a period of one year, and is renewable. The policy can be extended to the proposer’s spouse and dependent children, and offers protection to members even when they travel abroad. 

Bajaj Allianz Personal Accident Policy 

Policy buyers can choose three covers under this policy – a basic cover, a wider cover, or a comprehensive cover. The risk cover for each option chosen will vary. Apart from the risk coverage, the policy also offers other benefits, such as an education bonus for children, a cumulative bonus, and a reimbursement of expenses incurred for transportation of the policyholder’s mortal remains. This policy can be purchased on a family floater basis to cover the proposer, the spouse and dependent children. This is a yearly policy, and can be renewed every year. 

Universal Sompo Individual Accident Policy 

The Individual Accident Policy from Universal Sompo is available on a yearly basis as an individual or a family floater plan. The policy can be used to cover any individual between 5 and 75 years of age. Individuals between 65 and 75 years can purchase new policies with a 20% premium loading. In addition to the risk cover, this policy offer members other benefits, such as reimbursement of costs incurred to transport the mortal remains, ambulance expenses, education benefit, loss of employment benefit, and cost of the article of clothing damaged in the accident, within the limits that are pre-set by the insurer. 

Bharti AXA Personal Accident Insurance Plans 

The Personal Accident Insurance Plan from Bharti AXA covers accidental death, permanent total disablement, temporary partial disablement, medical expenses incurred due to the accident, double indemnity if the insured was travelling as a passenger and has suffered from total permanent disability or accidental death, and daily allowance when hospitalised. You can choose a sum insured of Rs.10 lakh, Rs.20 lakh, or Rs.30 lakh. The policyholder will also receive a cumulative bonus for all any claim-free year. 

FAQs about Personal Accident Insurance Plans 

1. What are the various benefits that are covered under personal accident insurance plans?

Most personal accident insurance plans cover the following:

• Accidental death
• Total disability (permanent or temporary)
• Temporary disability
• Burns caused due to the accident
• Bodily dismemberment
• Loss of eyesight
• Ambulance charges
2. Can I extend the cover to my dependants?

Yes, many personal accident insurance plans are available on an individual basis or on a family floater basis. If you take up a plan on a family floater basis, you can extend the cover to your spouse, dependent children, and parents (in most cases).

3. Is cashless hospitalisation available under personal accident insurance plans?

No, most insurers do not provide cashless hospitalisation facility for personal accident policies. However, post your discharge from the hospital, you can file a reimbursement claim with the insurer, and have your expenses reimbursed.

4. Do I need to purchase a personal accident policy when I already have a comprehensive health cover?

Yes. Your health insurance policy will provide you a cover for any hospitalisation expenses that may arise, provided the expenses fall within your sum insured amount. However, personal accident insurance policies provide the insured with a lump sum payout, if he/she meets with an accident. These funds could safeguard you and your family from financial hardships.

5. Are there any additional benefits that are offered by personal accident insurance policies?

Most policies come with a range of other benefits, apart from the risk cover, such as:

• An education benefit for children of the policyholder
• Loss of job benefit
• Daily allowance when hospitalised
• Reimbursement of expenses incurred when transporting the mortal remains
• Reimbursement of medical expenses
6. How can I file a claim?

The steps to file a claim, if the insured has met with an accident, are:

• The insurer must be notified of the accident immediately. In case the insured has met with an accidental death, the nominee should inform the insurer, as soon as possible. In most cases, the insurer will require you or your nominee to submit a written notice.
• All due hospitalisation reports, FIR, and other supporting documents need to be submitted to the insurer.
• The death claim form, along with any necessary documents, need to be submitted.
• The insurer will settle your claim a few days after receiving all due documents.
7. What constitutes Permanent Total Disability?

Permanent Total Disability covers the following:

• Loss of sight in both eyes
• Bodily dismemberment of at least two limbs
• Dismemberment of one limb and loss of sight in one eye
8. Can international citizens be covered under personal accident policies?

No, almost all personal accident policies offered by insurers in India are available only to Indian citizens. However, these policies also cover Indian citizens even when they are travelling abroad. International citizens cannot purchase personal accident policies that are offered by insurers in India.

9. How do I determine how much to opt for as my sum insured?

Various factors can come into play when choosing the sum insured, such as the age of the policy buyer, annual income and occupation, whether the plan is bought on an individual or family floater basis, etc. Ensure you consider all these aspects before opting for a sum insured.

10. Am I entitled to receive any tax benefits when I purchase a personal accident insurance policy?

No, premiums paid towards personal accident policies are not eligible for tax benefits.

11. Are they any limitations or exclusions to personal accident policies?

Yes, personal accident policies come with an exclusion criteria. Certain things like, accidents caused while driving under the influence of alcohol or while participating in extreme sports, etc. are not covered by most policies. For a plan-specific exclusion criteria, ensure you go through your policy document.

12. How do I go about cancelling my personal accident policy?

You can cancel your personal accident policy at any point during the policy term. If you cancel the policy during the free-look period (15 or 30 days, in most cases), the insurer will refund the premium amount that you paid, in full.

13. Will the insurer provide me a daily cash allowance for the entirety of my hospital stay?

Most personal accident policies will provide you a daily allowance for a maximum period of 30 days, provided you are hospitalised after your accident.

14. Until what age can I purchase a personal accident policy?

Insurers will usually set the maximum age of entry for personal accident policies between 60 and 70 years. In some cases, if you purchase a new policy after the age of 60 or 65 years you might have to pay a higher premium, or the sum insured offered will be a lower amount.

15. Do I have to undergo a medical test or examination to prove my insurability to the insurer?

No, medical tests are not a prerequisite to purchase a personal accident policy.