• Introduction
• Fixed Cash Benefits
• Special Covers paid on reimbursement
• Pricing will depend on your occupation
• The premium differs for various risk classes
• How much cover is adequate?
• The Insurer may have limits on coverage
• Comparison of Top Personal Accident Insurance Plans

In the earlier article, we discussed why personal accident insurance is an important and smart policy to buy. We also spoke about why some policies like these will never be sold, why you will never see advertisements for such products.

We take this topic forward with further details about the value-added benefits available in the modern personal accident policies, and the comparison amongst various leading insurance plans.

The modern personal accident policy tries to provide a comprehensive solution to every problem around the risk of an accident. The following are value-added coverage benefits available - either as an inbuilt benefit or as an add-on.

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These are fixed amounts of cash benefit that the insurer will pay you on the occurrence of an event. Here are a few such benefits.

1. Adaptation allowance – You may have to modify your house and/or vehicle like a car so that your mobility is not compromised. This coverage pays a benefit to the policyholder to make lifestyle modifications following a disability. Coverage may also be offered on reimbursement basis in some plans.
2. Child Education Benefit (Education grant) – under this cover, an additional fixed benefit is paid in case of accidental death and permanent total disability to take care of the education expenses of your child.
3. Transportation expenses – The cost of transporting a dead body can be very high. Some insurance companies cover the cost incurred in transporting the dead body from the scene of the accident or hospital to the residence is covered. Some plans also cover the expenses incurred in transporting the family member to the hospital. The coverage may also be offered as reimbursement by certain insurers.
4. Funeral expenses – Your family is paid additional benefits to cover the cost of the funeral.
5. Hospital daily cash allowance – If the insured is hospitalized following an accident, a daily allowance is paid per day of 24-hour hospitalization. This allowance is fixed and does not depend on the actual medical costs incurred.

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1. Medical expenses – Apart from covering the loss of earnings due to disability, you can also cover the hospitalization costs, following an accident up to a specified limit. This add-on is used by many to cover their office or home staff. The benefit is paid on a reimbursement basis where actual medical costs incurred are paid.
2. Burns and Fracture – Minor fractures that do not result in disability are not covered in the regular personal accident cover. Some plans provide separate cover for breakage of bones up to a certain limit.
3. Burns – Accidents that result in major burns may not cause disability, but can impact lifestyle and earning capabilities. Some policies provide a special add-on cover for burns.
4. Adventure Sports Cover – Insurers may cover accidents due to adventure sports on payment of additional premium up to the full sum insured or a separate limit.
5. Ambulance cover – this benefit covers the cost of an ambulance in case of hospitalization. The actual cost incurred on hiring an ambulance is covered subject to specified limits.
6. EMI payments – if, due to an accident you are permanently disabled and unable to pay the EMIs for your loan, the policy pays such EMIs for a few months if this add-on is selected. The actual amount of EMIs are paid subject to a maximum limit specified under the policy
7. Loan protection cover – under this cover, in case of accidental death or total permanent disability, the personal accident policy pays off your outstanding loans subject to a maximum of the sum insured of the policy. The actual amount of outstanding loan is paid under the plan.

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We did mention this in our earlier post. If you are an executive in an MNC you have a limited risk of accidental death and disablement compared to a pilot who is constantly exposed to such risks.

Thus, since occupation directly impacts the probability of claims, there are three risk classes that have been identified to categorize individuals. Depending on your profession or occupation, you would be classed in a risk class and your sum insured and the premium would be determined.

The three risk classes and their respective occupations are as follows –

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Personal accident insurance plans in India are very affordable. A 15-lakh plan covering accidental death, permanent disablement and temporary total disablement would cost you only Rs 2213 including taxes which is not a bad deal. What you should know, however, is that the premium depends on the risk class. The premium of Rs.2213 is for risk class I. if you would have been in risk class III, the premium would have shot up to Rs.3540 inclusive of taxes.

For example, Star Health rates its premiums as follows across the different risk classes for a one-year policy term if the sum insured is Rs.10 lakhs–

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While insurance companies specify the minimum and maximum limit of sum insured that you can avail, you have the choice of choosing a suitable coverage level within the specified limits. For instance, if the insurance company specifies a maximum and minimum sum insured of Rs.1 lakh and Rs.5 crores respectively, you can choose a sum insured within this range.

Thus, it becomes important to choose the ideal coverage amount to ensure that you and your family would be optimally secured in a contingency.

Ideally, the sum insured of your personal accident policy should be calculated like the sum assured of your term insurance cover.

As a thumb rule, you should have a sum insured which is at least 15-20 times your annual income.

You can also use the Human Life Value method to calculate the sum insured. Under this method, your human life value is calculated based on your current income.

Here’s a simple example –

• For a 35-year-old man who earns Rs 10 lakhs p.a.
• He is expected to work till 65 years
• So, ignoring the possible promotions and salary increase, he can earn a minimum of Rs 3 crores by earning Rs 10 lakhs over the next 30 years

So, now if he dies, his family would stand to lose Rs 3 crores. Thus, a personal accidental coverage of Rs 3 crore would be his basic human life value and a sum insured equivalent to this value could be taken.

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Unlike other insurance policies wherein you have the choice of the coverage level, the sum insured under personal accident plans depends on your monthly income. Insurance companies specify a multiple of the monthly income up to which you can avail as the sum insured. Sometimes, the sum insured might vary according to your risk class and in other cases, the sum insured can be a fixed multiple of your monthly income.

For instance, Future Generali allows a sum insured of 144 times your monthly income, in whatever risk class that you are in, for accidental death and permanent disablement. For temporary total disablement, however, the multiple is 24 times the monthly income and the coverage is not available for individuals falling in Risk Class III. In the case of HDFC Ergo Health’s Individual Personal Accident Policy, you can avail of a sum insured of 20 times your annual income if you are salaried and 25 times your annual income if you are self-employed.

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There are more than 20 general insurance companies and all of them provide a personal accident policy. Choosing the best is, therefore, a challenging task. Here are, therefore, six plans we found that give excellent coverage options.

Modern-day personal accident plans have risen above the basic coverage of accidental death and disablements. Nowadays, you can also find coverage for critical illnesses, hospital cash benefits, loan repayment, and whatnot. These coverage benefits are allowed on optional bases and you can choose the coverage of the policy as per your need.

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