What is Personal Accident Insurance?

Farhad was driving back to his office after meeting a client. As the traffic signal turned green, he turned towards his office building. Suddenly, there was a loud bang. A speeding bus had rammed into his car. Farhad was trapped inside. Onlookers rushed Farhad to the hospital. There, the doctors informed him that his fractures required him bed rest till it heals completely. That meant at least a month off from work. The person on the bed next to him, confused by Farhad’s calm reactions, asked why is he not worried? Farhad told him that though the injuries are painful, that is all he has to worry about because he has a good personal accident insurance. The other man, interested now asked how it works. “Personal accident insurance is a policy that can reimburse your medical costs, provide compensation in case of disability or death caused by accidents. There are other benefits too that you can get with an IPA insurance” said Farhad, continueing with the following:

Accidental death
If the policyholder dies in an accident then his nominee gets accidental death compensation. The family is financially secure in this situation. The compensation can vary from Rs 5 lakh to Rs 1 crore.

Permanent total disability in an accident
At times, despite medical help the victim becomes disabled for life. Then the insurance policy pays a certain amount depending upon the nature of the disability. The policy also covers loss of speech, loss of vision in both eyes, and hearing loss in both ears.

Permanent partial disability
This is applicable if a person has partially lost their hearing in one ear or suffered eyesight loss in one eye. Or, it could be that the policyholder has lost an index finger, a thumb, or even a hand. In all these cases, the policyholder can approach the insurer for a claim.

Transportation benefit
Some insurers also grant a family transportation benefit. Say, the insured person is in a hospital outside 150 km of his home. The immediate family member will incur certain transportation expenses to reach the hospital. The insurance will reimburse these expenses up to a maximum of Rs 50,000.

Further benefits
The insurance covers other factors like education and employment benefits, and funeral expenses. You also get coverage for hospital charges, including ambulance costs. Some policies offer an educational allowance and home or vehicle alteration benefits.

Before buying your policy, you must keep these things in mind

Important dates
An accident insurance policy provides a free-look period of 15 days. This allows you to cancel the policy within that period. There is a ‘grace period’ of 30 days for policy renewal.

Exclusions
Your insurer will not cover any loss arising out of acts of war or terror. It will not cover any claims regarding existing physical disabilities or pre-existing diseases. The exclusions also comprise mental disorders, HIV or AIDS, and congenital anomalies. The insurer will not honour any intentional injury claims. Any injuries arising from participation in adventure sports come under exclusions as well. This includes activities like bungee jumping, mountaineering, and river rafting.