Individuals should consider a personal accident cover as a rider with either health or term plan for a financial safety net. It is ideal for frequent travellers, those working in high-risk sectors or having dependent family members.
In such a cover, the insured gets a lump-sum payout in case of serious injury, disability, or death due to an accident. It offers financial support to cover for loss of income, rehabilitation, or financial support for the family. In case of partial disability, the payout is a fixed percentage of the sum insured based on a pre-defined disability scale or on the severity.
“Buying personal accident cover as a rider with term or health insurance keeps costs low, simplifies coverage, and ensures there are no protection gaps between medical care and income loss,” says Shilpa Arora, co-founder and COO, Insurance Samadhan.
Rider vs. Standalone
Obtaining personal accident insurance cover through a rider attached to a base policy is less expensive than buying an individual policy as rider prices are less than the price of standalone policies. However, if an individual has a greater need for coverage, standalone policies offer a higher sum insured and provide greater coverage options than riders.
Coverage Income protection: A personal accident policy will offer weekly or monthly payouts during temporary disability, helping families manage daily expenses when earning stops.
Lump-sum benefit: In cases of permanent disability or death due to an accident, the policy pays a fixed lump sum—crucial for long-term financial stability.
Complements health insurance: Health insurance covers treatment; PA cover supports livelihood continuity.
No dependency on hospitalisation: Benefits are triggered by the accident itself, not just medical bills.
“It acts as a vital safeguard for those with regular income commitments, ensuring that unforeseen accidents do not disrupt essential life goals,” says Siddharth Singhal, business head – Health Insurance, Policybazaar.com.
Exclusions
Typical exclusions include injuries occurring as a result of suicide or self-inflicted injury, injuries sustained due to intoxication or substance abuse or injuries sustained while engaging in hazardous activities without prior notice to your insurer. Pre-existing disabilities will not be covered by your personal accident insurance.
Mandatory with motor insurance
A limited personal accident cover of Rs 15 lakh is mandatory with motor insurance for the owner-driver. This provides Rs 15 lakh as compensation in case of death or permanent total disability of the owner-driver due to an accident while driving, mounting, or dismounting the vehicle. If the owner-driver already has an existing personal accident cover of Rs 15 lakh or more, he can submit a declaration and not buy it with motor insurance.
Sarita Joshi, head of Health and Life Insurance, Probus, an insurance broking firm, says though motor personal accident insurance fulfills a legal requirement, it does not provide comprehensive personal accident protection. “Injuries sustained in other situations such as at home, at work, or while walking are not covered under motor personal accident insurance,” she says.