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01 Jul, 2022 | Personal Accident Insurance

8 Things You Should Know About a Personal Accident Insurance Policy

Aakansha Jain
By Aakansha Jain
Research & Content Ninja at Beshak
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Accidents don’t tell and happen. They can occur anywhere, to anyone, at any time. And the consequences of accidents are both physical and financial. While accidents can cause injuries that lead to disability, they can also result in death. And this can have a significant economic impact on your family, leaving them in a financially distressed situation. However, there's one insurance policy that will help mitigate the financial risk associated with both accidental disabilities and accidental death - the personal accident insurance policy

In this article, we discuss this lesser-known insurance policy - what it covers, how much it costs, how the premiums are charged, and many other things. First, let’s understand the personal accident insurance meaning.

What Is Personal Accident Insurance? 

Personal accident insurance is an insurance policy that reimburses your medical expenses, and provides compensation in case of accidental disability or death.

8 Things You Should Know About Personal Accident Insurance

1 - Covers More Than Road Accidents

When we talk about accidents, we don’t only mean road accidents. Accidents can happen even at home, although they don't get reported. But there's always that last step of the staircase you could miss or get an electric shock or fall down the table while cleaning the fan and injure yourself badly. A personal accident policy covers accidents that take place anywhere - on the road, at your home, or even at your workplace.

2 - Covers Permanent Total Disabilities

Personal accident insurance will cover various disabilities, including permanent total disabilities caused due to accidents. In this case, you’ll get a certain percentage of the total cover amount as per a pre-agreed rate card. 

Permanent total disabilities are irrecoverable injuries caused due to accidents where you lose a core function of the body. These are disabilities that cannot be reversed even after treatments and long-term therapy. Losing sight in both eyes, speech loss, or losing both limbs are examples of permanent total disability. 

3 - Covers Permanent Partial Disabilities

A personal accident policy even covers permanent partial disabilities. These include injuries that result in disabilities with no possibility of recovery, even with treatments. However, these are partial injuries, like losing one finger or a limb, losing sight in one eye, losing the ability to hear in one ear, etc. Here, too, you’ll get a certain percentage of the total coverage as per a pre-agreed rate card. However, the payout will depend on the seriousness of the disability.

4 - Covers Temporary Total Disabilities

Temporary total disabilities are recoverable injuries or disabilities that make you bedridden for a certain period. When you get temporarily disabled, the personal accident insurance policy will pay you a certain percentage of the total coverage for the period you are temporarily disabled. This is usually 1% of the policy cover per week. Meaning, if you buy an INR 50 lakhs personal accident policy cover, it will pay INR 50,000 per week for every week of disability. 

5 - Can Be a Rider or Separate Cover

You can buy the personal accidental insurance cover either as a rider with your base term or health insurance policy or as a separate plan. While a rider provides coverage for limited cases only, such as permanent and total disability, a standalone personal accidental insurance cover will offer more comprehensive coverage. 

6 - Can Be Extremely Cost-Effective

While the premiums are decided according to the risk your occupation carries, generally, personal accident insurance costs are considerably cheaper. 

7 - Premiums May Vary Based on Your Occupation 

As stated above, the premiums of a personal accidental insurance cover are charged based on your occupational risk. There are three risk classes identified -

Risk Class IRisk Class IIRisk Class III
Risk - LowRisk - MediumRisk - High
  • Doctors
  • Lawyers
  • Teachers
  • Accountants
  • Bankers
  • Administrative Executives
  • Supervising Engineers
  • Builders
  • Drivers
  • Contractors
  • Veterinary Doctors
  • Machine Operators
  • Garage Mechanics
  • Professional Athletes and Sportspersons
  • Individuals engaged in Mountaineering, Skiing, Ballooning, River Rafting, and other Adventure Sports, etc.
  • Individuals working in underground mines
  • Jockeys
  • Professional Racers

Your premiums will be low if you belong to risk class I. If your job is too risky for the insurer to cover, for instance, if you work in an underground mine or are a professional racer, they might charge higher premiums.

8 - Covers Accidental Death 

In addition to covering the disabilities caused by accidents, some personal accident insurance policies also provide a cover for accidental death. Meaning, if you die due to the accidental injury within a year, your nominee will be paid 100% of the sum assured. 

So, these were 8 important things you should know about a personal accidental insurance cover. If you have any further questions related to personal accident insurance, you can post them on the Beshak Insurance Forum and get answers from insurance experts within 6-8 hours!

Key takeaways
  1. Accidents can occur anywhere, to anyone, at any time, and they can either lead to disability or death. Accidental disability or accidental death can have a major financial impact on your family.
  2. A personal accident policy will mitigate the financial risk of accidental disabilities and death. 
  3. It covers various disabilities such as permanent total disabilities, permanent partial disabilities, temporary total disabilities, and accidental death.
  4. Road accidents and accidents that take place at home or at your workplace are covered under a personal accident plan.
  5. You can either buy the personal accident policy as a rider or a standalone policy. 
  6. While a rider will have certain limitations in terms of coverage, a standalone personal accidental insurance cover will provide you with comprehensive coverage.
  7. The premiums of a personal accidental insurance cover are decided based on your occupation. If your profession carries a high risk, the insurer will charge higher premiums and vice versa.
Aakansha Jain
Written by,
Aakansha Jain, Research & Content Ninja at Beshak

Aakansha is a Content Ideator and Writer at Beshak. With her easy-to-understand content, she makes insurance simple for everyone. She comes with a strong background in finance and commerce and wants to help families make positive insurance decisions that are good for a lifetime.

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