Few people have taken cover to protect themselves against the risk of personal accidents and the medical complications they entail. Personal accident insurance is an attractive option; not only does it cost less than other insurance policies, it also covers all accidents. Personal accident policies cover you for one or more of four contingencies in the event of an accident: death, permanent total disability, permanent partial disability and temporary total disability.

As activity increases, there is a need to insurance protection with personal accident cover.

Most people think that they will be lucky enough not to fall victim to an accident. But the truth is that accidents can and do happen to anybody at anytime - usually when least expected. For example, In Mumbai almost 12 lakh people die in road accidents in India every year. Those injured number nearly half a crore.
If you are unlucky enough to have an accident that results in a serious injury, you may not be able to return to work quickly. And, if you have to take an extended leave of absence from work, your income could suffer greatly.
Many insurers offer standalone personal accident insurance policies; however, limited personal accident cover is also often included in motor and travel insurance policies. The benefits of standalone policies is that the cash payments are larger and there are usually fewer restrictions. For example, if the cover is under your travel insurance, the accident must have occurred whilst travelling.
Personal accident plans usually provide cover for a range of injuries arising from accidents, including permanent disablement. This could include, but is not limited to, total and permanent loss of use of one or two limbs and complete and irreversible loss of sight in one or both eyes. 
Most accident plans will also include an accidental death benefit providing a generous cash lump sum to your estate in the event of death caused by an accident, while plans only offering accidental death benefits are also available. The amount paid can vary and often plans will have different levels of cover. Some plans even pay out differently depending on the circumstances of the accident (i.e. accidental death as a result of a road traffic accident). Cash payments with this cover can help your family with the often unexpected financial burdens brought about from such things as a loss of income, funeral expenses and even to cover the potential impact on your loved ones’ incomes during bereavement.
Whom does it cover?

Personal accident insurance policies were earlier issued for one-year terms like any other non-life insurance product. However, nowadays, buying one for a 5-year term is not a problem. The minimum and maximum age at entry is 18 to 70 years of age in most cases. This is primarily a pre-underwritten product and no medicals are called for.

Benefits

The policy offers a sum assured in case of death of an insured person due to an accident. It also provides for compensation in case of permanent and total loss of limbs, sight, due to an accident. Some insurers also cover the insured in case of death or permanent disability due to acts of terrorism. There are no maturity benefits available under this policy.

For an additional premium, one can add cover to family members. There are options available to enrich the cover by subscribing to add-on benefits.

No claim may fetch you a hike in your sum assured at no extra premium as a reward when you renew the policy. For a clear understanding of the benefits, ask for policy wordings.

Where does it fit?

The product works best when you have an existing life insurance cover. In no way can a personal accident insurance cover be treated as a replacement of life insurance cover. It is difficult to buy an accident cover for large sums along with life insurance policy as the accident cover cannot exceed the basic life cover.

Exclusions

The prime exclusions are suicide, military service, war, illegal act, AIDS, dangerous sports and diseases. Insist on the list of exclusions before you buy a policy.
The need for insurance is high when you are at the start of your career and have loans to pay for.
Personal accident insurance, if clubbed with health and pure term life insurance, can emerge as a good solution to your risk cover needs.

Do not avoid buying one merely because it does not offer you a tax break or a return on the maturity of the policy.

One of the policy’s features are explained below.

BAJAJALLIANZ- Personal Guard.

What is Personal Guard Policy?
Personal Guard is a policy that covers the insured against bodily injury or death caused due to accidents.

The coverage is broadly divided in 3 types…
Basic:                 Death + Children‘s Education Bonus
                         -Maximum SI 100 times of monthly income.

Wider:               Death + Permanent Total Disability + Permanent
                          Partial Disability + Children’s Education Bonus
                         -Maximum SI 60 times of monthly income

Comprehensive: Death + Permanent Total Disability + Permanent
                          Partial Disability + Temporary Total Disability +
                          Children’s Education Bonus
  - Maximum SI 24 times of monthly income or                                                                                                                                                                             maximum of 5 lakhs

Additional: Medical Expenses + Hospital Confinement

What are the benefits of this policy?

- Highest compensation of 125 % of the sum insured incase of
    Permanent Total Disability
- Medical Expenses arising out of accident
- Children’s education bonus / in case of death or permanent total
Disablement 
- Cumulative bonus @ 5% per claim free year to a maximum of 50%
    (Reduced by 10% if claim is lodged)
- Family discount of 10%.

This is one of the good policies available in the market and explained only for illustrative purpose. It does not mean policies provided by other companies are not good.

There is no denying the fact that anyone can be a victim of a personal accident and the financial after effects could, in turn, be great. But luckily, there are low-cost personal accident plans available to provide you with real peace of mind – whether you choose a comprehensive personal accident plan or an accidental death cover plan.

email2friend

This entry was posted on Tuesday, February 24th, 2009 at 12:09 am and is filed under Mukesh Dedhia's published articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.