Standard Personal Accident Insurance: 10 Things to Consider

Accident insurance is an area of growing interest in India, but most people are unaware of the fine print of these policies. This article sheds light on 10 important factors:

#1 There are minimum and maximum age entry limits.

The minimum entry age for standard personal accident insurance policies in India is 18 years, while the maximum age is 70 years across all insurance providers. However, you can choose a policy that covers the entire family on an individual basis. What this means is that the sum assured of the plan is applicable to each family member separately in case of accidental death or injury. If you have children, they may be covered from the age of 3 months to 25 years under your plan.

#2 There are limits on maximum sum assured.

As enshrined in leading accident insurance policies in India, the minimum sum assured of the plan is Rs 2.5 lakh while the maximum sum assured is Rs 1 crore. You can choose the sum assured amount in multiples of Rs 50,000 only. Please note that the premium on the plan rises commensurate with the sum assured you choose.

#3 There are different types of covers.

Gone are the days when accidental insurance was a generic policy in India. Leading insurance providers today offer three base covers in their standard personal accident insurance policies. They are:

• Death
• Permanent total disablement
• Permanent partial disablement

In addition, you can choose three optional covers based on your future needs (check these in detail in Points #7 and #8).

#4 You get the full benefit of the policy if…

The entire benefit of the accidental insurance is not immediately applicable on the accident instance. The benefit is payable only upon the unfortunate demise of the insured person due to the injury sustained in an accident. Death by natural causes is not liable for any benefits under this plan. Also, the death must occur within a year from the date of the accident – demise after prolonged treatment or death after one year of the accident but owing to accidental injuries, is not covered.

#5 There are specific clauses for claiming disability.

Just as there are clauses pertaining to claiming the benefit against death, there are terms and conditions for claiming benefits for partial or total disability arising from the accident. The benefit applies to permanent disability from 1% to 50% of the sum assured depending on injury severity and extent of disability. You can claim up to 50% of the sum assured if you lose one entire hand, or one entire foot, or eyesight in one eye or hearing in both ears due to the accident. Some insurers offer up to 40% of the sum assured on the insured losing the fingers of the working hand.

#6 Dependent children get an education grant under the policy.

Apart from covering the insured, the standard personal accident insurance policy offers the option to choose an education grant for dependent children of the insured. But this grant is offered in full only if the insured unfortunately passes away due to an accident, or faces permanent total disability that prevents them for working and seeking an income. The grant is paid one-time and does not exceed 10% of the sum assured per child. Every dependent child of the insured is equally covered till they reach the age of 25 years.

#7 The optional cover is an important factor.

Optional covers include hospital costs to treat the accident injuries, medical treatment for the same, etc. This cover offers up to 10% of the base sum assured. It also covers the costs of fitting prosthetics or buying equipment to make your life easier to live post disablement. It may also cover essential corrective dental treatment and plastic surgery.

#8 Disability and optional covers have a correlation too.

Optional covers pay 0.2% of the base sum assured per week if the insured is completely disabled, for a minimum period of 4 weeks.

#9 How cumulative bonuses are computed.

The cumulative bonus is any addition to the sum assured without increasing the premium. It applies only to the base cover of the plan and is increased by 5% for each claim-free policy year not exceeding 50% of the sum assured if the policy is renewed without breaks. The bonus reduces if claims are filed in any particular year.

#10 Premium payment terms are flexible.

Insurance providers offer premium payment terms of annually, half-yearly, quarterly and monthly.

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