IRDAI has decided to mandate all general and health insurers to offer the standard personal accident insurance product from 01st April 2021 onwards.
With the objective of having a standard product with common coverage and policy wordings across the industry, the IRDAI has decided to mandate all general and health insurers to offer a standard personal accident insurance product. The product will have a basic mandatory coverage while insurers will be allowed to add any optional covers as well. The pricing in terms of premium is, therefore, left for the insurers to arrive at. General and Health Insurers shall offer this product from 01st April, 2021 onwards.
The insurance market is having a wide variety of personal accident insurance products. Each product has unique features and the insuring public may find it a challenge to choose an appropriate product. Going forward, it will be relatively easier for one to choose the personal accident insurance product. Every General and Standalone Health Insurer, who has been issued a Certificate of Registration to transact General and/or Health Insurance Business, shall mandatorily offer this product.
Such a policy will cover Death, Permanent Total Disablement and Permanent Partial Disablement as Basic Cover. Under Permanent Total Disablement, a benefit equal to 100% of Sum Insured shall be payable if an insured Person suffers Permanent Total Disablement solely and directly due to an Accident during the Policy Period.
Temporary Total Disablement, Hospitalisation Expenses due to Accident, Education Grant are some of the optimal covers, an insurer may add to the policy.
The base covers of Standard PA product and the optional covers “temporary total disablement benefit” and “Education grant” shall be offered on a benefit basis. The optional cover “Hospitalisation Expenses due to Accident” shall be offered on an indemnity basis.
The minimum sum insured shall be Rs. 2.5 lakhs and the maximum sum insured shall be Rs.1 Crore. Beyond the range specified above, insurers can offer on their own and can use the same name for the product if all terms and conditions remain the same. The minimum entry age shall be 18 years and maximum age at entry shall be at least 70 for the persons covered.
The product will have a provision of Cumulative Bonus (CB). The Sum insured (excluding CB) shall be increased by 5% in respect of each claim free policy year, provided the policy is renewed without a break subject to maximum of 50% of the sum insured. If a claim is made in any particular year, the cumulative bonus accrued may be reduced at the same rate at which it has accrued.