Why A Personal Accident Insurance Policy is The First Insurance That You Should Buy?

It’s likely that you have already purchased term and health insurance policies, and you are now content that you have adequately protected yourself. However, you must first identify the gap in your insurance portfolio before you put your insurance planning on hold. Your family will only receive money from your term insurance policy if you pass away. If you make it through the term, you won’t receive anything in exchange. What if, God forbid, you suffer an unintentional disability that also results in income loss? There will be additional costs in addition to medical ones, such as household expenses and loan EMIs. which you would need to manage. It might be challenging for you to manage all these expenses if you don’t have any income. However, your term insurance provider will not reimburse you because you are still alive.

The result will be that you will be responsible for covering all of your medical costs without assistance from anyone. Your health insurance policy will cover your medical expenses up to a certain amount if you end up in the hospital following an accident. But in addition to paying for medical care, you might have to take a pay cut. Consequence: In addition to making the necessary arrangements to recover from the financial loss that may result from a potential loss of income, you will need to pay the outstanding medical bills.

So where is the solution?

Even after purchasing term and health insurance, there is still a gap in your insurance portfolio that can only be filled by a personal accident insurance policy. The advantages of purchasing a personal accident insurance policy, which primarily covers all types of disabilities, include the following.

  • A basic accident insurance policy covers both accidental death and disability and can be further enhanced to get extra cover
  • From minor to major, a personal accident policy covers all types of accidents ranging from falling off a stair at home, fracturing an arm while playing football to getting hit by a vehicle
  • It is a useful policy as it offers coverage against partial, temporary, or full disability and even the loss of income
  • Some of the policies are bundled with extra features like child education allowance, coverage for injuries caused due to terrorism, transportation of mortal remains, etc.

Some Horrifying Statistics:

  • 400 road accident deaths/day took place in 2015
  • Due to natural calamities, 20,201 people died in 2014
  • 29,903 people died due to drowning in 2014
  • Over 1.13 lakh people died in fire accidents in last six years
  • total of 27581 Indians died in railway accidents in 2014
  • More than 200 people died and 330 severely injured in train accidents in the last one year

When should you buy and how much coverage is sufficient?

Because accidents can occur anywhere, including inside your home’s four walls, you should purchase personal accident insurance coverage equal to 100 times your monthly salary. To put it another way, if your monthly salary is Rs 5,000, your personal accident insurance should at least be worth Rs 50,000. A policy should be purchased as soon as possible because accidents are more likely to occur when a person is young.

How much payout is available?

The type of disability and injury will determine whether or not they are covered. The insurer will pay the full amount of the insurance policy in the event of death or the loss of two limbs or hands; however, if only one eye or hand is lost, the insurer will only pay half the amount. The majority of insurers made the following payout:.

Loss of use/ Actual loss by physical separation ofPercentage of Capital Sum Insured
Sight of both eyes100%
Both hands100%
Both feet100%
One hand and one foot100%
One eye and one hand or one foot100%

How to claim?

In fact, filing a claim under a personal accident insurance policy is easy since you don’t need to submit to any medical examinations to demonstrate your injury. You only need to provide information like your contact details, a copy of your policy, a summary of the accident, a medical report, etc. when notifying the insurer within the allotted time. Your claim would be resolved once you had provided all the required documentation.

Is it costly?

No, not at all. In fact, the cost of a personal accident policy is significantly less than that of term insurance. You will only need to pay Rs 1,482 per year, or about Rs 123 per day, for a Rs 5 lakhs personal accident insurance coverage. Furthermore, the occupation of the applicant is a major factor in determining the premium for a personal accident insurance policy, not the applicant’s age. As a result, a 25-year-old crime reporter will have to pay a higher premium than a 50-year-old dentist. Additionally, you receive significant discounts when you choose to purchase the policy online. The insurer can reduce administrative expenses by offering online personal accident insurance policies, and these savings are then passed on to policyholders in the form of lower premium rates. Furthermore, a few insurance companies provide two- or three-year long-term personal accident insurance policies. Choose such strategies to save money!

For the premium calculation, insurers can classify occupations under the following heads:

Class 1 (Low Risk)Class 2 (High Risk)Class 3 (Very High Risk)
TeacherVeterinary Doctors
DentistBuildersCircus Performers
AccountantGarage MechanicsProfessional River Rafters

Standalone or rider?

Choosing between a full-fledged insurance policy and a rider is the next step if, at this point, you have made the decision to purchase a personal accident insurance policy. Choosing a standalone personal accident insurance policy over a rider is strongly advised because it is more comprehensive.

A standalone policy also covers a wider range of losses than a rider, which only covers accidental death and permanent disability. These losses include partial or temporary disability and income loss. Additionally, even if your personal accident insurance through your employer covers you, you still need to purchase your own policy. P

ersonal accident insurance should be at least five to ten times your annual salary, but your employer’s coverage may be less. Moreover, when you leave your job, the group personal accident insurance policy will expire. Your personal accident insurance can be expanded to include your family members.

Always keep in mind that while you can’t prevent accidents from occurring, you can protect yourself by having a suitable safety net in the form of a personal accident insurance policy. By the way, I’m assuming you now understand why a personal accident policy is the first type of insurance you ought to purchase.

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