Personal Accident Insurance: Do you need it?


It does not require great mathematical skills to calculate how a major disability or death can devastate a family and its long-term plans. A disability can create a major dent in your income.

Buying an affordable personal accident insurance that will cover this serious financial risk is therefore a no-brainer. A ₹20-lakh policy covering an individual should cost around ₹250 a month.

These are the things you should know before buying a policy:

Personal accident insurance is a policy that makes available cash to the nominee or person insured in case of death or disability of the person who is covered.

Claim payments are not linked to the expenses incurred. It is paid as a lump sum, based on the degree of disability mentioned in the policy document.

Personal accident policies try to insulate you from the financial risk of accidents, with a comprehensive cover. It covers accidents such as a slip in the bathroom, sport injuries, road accidents, stampedes, terror attacks, murders and natural calamities. Comprehensive policies also cover disabilities such as breakage of bones to permanent disabilities – both partial or total and temporary total disabilities that force you to be bed-ridden. They provide allied coverages for house or vehicle modification and evacuation. They cover accidents across the world. You must always compare the benefits, and go for the most comprehensive one.

When you sign up, you need to be clear about the standard exclusions in any insurance policy. For instance, standard accident policies will not cover adventure sports, illegal activities such as drink driving, war-related injuries or self-inflicted injuries.

Personal accident insurance should ideally be the first policy you buy when you start earning . At a young age, the risk of accident is higher, especially if you use a two-wheeler for regular commute or travel by public transport. You must buy a cover that is at least 10 to 15 times your annual income. The policy should ensure you and your family are adequately covered for living expenses against death or any permanent, partial or temporary loss of income.






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