Venkat, an IT professional, the only earning member of his family met with an unfortunate accident while on his way home. As a consequence he had to undergo surgeries for multiple injuries. Unfortunately he also lost his right arm. His disability was partial but permanent, which took months together to recover. This also meant those many months of loss of income. However, Venkat had invested in a life as well as a health insurance policy for unforeseen situations like these. Unfortunately like most of us though, he had not invested in a personal accident policy, a benefit policy that supports you and family members financially in the case of any bodily injury or death as a result of an accident.
While his health insurance policy took care of the hospital bills of the multiple surgeries, there was no compensation for the loss of income since he was at home for 6 months recovering from the accident. His life insurance policy, which he had perceived to be an aid in such a situation, did not trigger since a life or term policy comes into effect only in case of natural death and total permanent disability.
How does the Personal Accident Policy Help?
A personal accident policy compensates the insured under 4 major heads along with other special benefits.
- Death – In case of an unfortunate incident the policy compensates the insured’s nominee with 100% of the Sum Insured
- Permanent Total Disability (PTD) – In case of PTD due to accidental bodily injury which might leave the insured in a condition that does not allow him to pursue any further employment, 125% of Sum Insured is payable to the insured. This amount varies from insurer to insurer.
- Partial Permanent Disability (PPD) – In case of PPD due to accidental bodily injury a certain percentage of Sum Insured depending on the disablement is paid to the insured.
- Temporary Partial Disability (TPD) – In case of temporary disability for instance a fracture or a dislocation etc, compensation is paid on a weekly basis or for the time period that you are not able to earn an income. This compensation would depend on the kind of PA plan a policyholder opts for. This weekly benefit is paid up to 100 weeks and takes care of the insured’s loss of income allowing him to take care of his health without any worries about his loss of pay due to long leaves.
Apart from this the policy also provides benefits like:-
- Children’s Education Bonus – In case of death of the insured a certain allowance is paid towards the cost of education of dependent children.
- Hospital Confinement and Accidental Hospitalization Allowances – The policy not only takes care of the hospitalization expenses due to the accidental injury but also provides an additional allowance towards a maximum of 30 days of hospitalization.
Things To Keep In Mind While Buying A PA Cover
Who can be covered under the policy?
You can cover yourself, spouse and dependent children under a PA Policy
Can I get all benefits under one policy?
You choose the covers depending on your requirement and financial eligibility. Typically a Comprehensive plan will cover you against death due to accident and permanent & temporary disablement. A Wider cover will cover death due to accident along with permanent total disability and partial permanent disability. A Basic cover will cover death due to accident only. The premium will depend on the plan and coverage that you opt for.
What is the correct Sum Insured to Opt for while looking for a PA policy?
The sum insured for a PA policy is directly proportionate to your income. The eligible Sum Insured will be in the range of 100 times to 120 times of your monthly income. This multiplier varies from insurer to insurer.
Do I get a benefit for a claim free year?
For every claim free year you are eligible for Cumulative Bonus of 10% of Sum Insured.
What is the process to make a claim?
Post any accident or fatality, the insurer must be intimated about the event within 30 days. Documents that must be kept ready to make a claim are claim form, copy of FIR, all investigation reports and certificates from the doctors and disability certificate etc. In case of an accidental death, one will need to submit death and burial certificates as well.
Let us take the case of Venkat, an IT professional with a monthly income of Rs. approximately 42,000. Had he opted for a comprehensive PA cover he would have received monetary compensations to take care of the financial burden. As a thumb rule the Sum Insured under the PA policy cannot be more than 120 times of the monthly income of the proposer, in this case Venkat. In his case the maximum SI that Venkat could opt for will be Rs. 50, 00,000/-. With comprehensive cover included under the policy, it would have taken care of his loss of income for the period he was recovering from the injury for 6 months. The premium he had to pay for this cover would be in the range of Rs. 5000 -7000 approximately. As financial compensation for loss of arm till the shoulder, Venkat would get 70% of his sum insured. Also, for loss of income for 6 months, he would get Rs. 5,000 per week, which would mean Rs. 1,20,000 for this period.
Bajaj Allianz always travels that extra mile to delight its customers. Choose Bajaj Allianz personal accident cover as we believe in being with our customer during challenging times.
Note: The above illustration is based on the benefits available under the Personal Accident policy of Bajaj Allianz General Insurance Company Ltd.
Contributed by : Mr. Suresh Sugathan, Head-Health Insurance, Bajaj Allianz General Insurance