Here is why you need a Personal Accident Insurance Policy

Importance of Personal Accident Insurance Policy:

Personal Accident insuranceAccidents can happen to anyone. Every day you are exposed to the danger of being hurt. It could be a road accidents or improper infrastructure at work. And whenever the accident occurs, it has grave implications. Most of the times, it may be permanent physical & financial damage.


Consider the case of Mr Mehta for a better understanding.

Mr Mehta, a top-performing sales manager, required travelling distances to meet targets. It was a foggy winter evening. He started on his bike from his office to meet one of his clients. Suddenly, his bike had a head-on collision with the truck. It was indeed an unfortunate accident. He lost both of his legs. He was not covered by any personal accident insurance. Consequently, the financial condition of the entire family was in shambles.

The case of Mr Mehta is not a unique one. In fact, the recent report released by the Ministry of Road Transport says something similar. The number of people killed in road accidents was more than by terrorism or natural calamities. It shows an alarming need for Personal accident insurance. At least you will be at peace about the financial security of your dependents in case of any exigency.

Personal accident insurance is a type of general insurance. It covers the risk of the loss of life or disablement due to accidents during travel or at work.

It covers burns, cuts, broken bones, ambulances charges, hospitalisation due to any accident, loss of limbs / eyesight, etc. You may choose the extent of coverage at the time of taking the policy.

It will ultimately fill the gaps in your insurance portfolio. If you are exposed to occupational hazards, then this is the thing for you. In all other cases, you ensure a financial stability against losses due to accidents. Especially, in the case of many outstanding liabilities, personal accident cover ensures timely repayment of loans in case of loss of repayment capabilities.

Coverage available under Personal Accident Insurance

You may buy a policy from amongst a gamut of top insurance providers in India. Most of the policies would provide your dependents with 100% of sum assured upon your demise due to accidents. In the case of temporary/permanent disability, you will get a proportional sum assured. Some insurers may even extend coverage to your dependents under a single policy.

You may also customise the policy to suit the typical dangers that you are exposed to every day.

Let me take you through various benefits available under personal accident insurance:

Accidental death

It means that the policyholder dies as a result of an accident or injuries caused by accident. The nominee of the policyholder, in such a scenario, would get 100% of the sum assured from the insurance company.

Permanent total disability

It means that policyholder sustains a permanent disability continuously due to an accident for 12 months from the date of the accident. It may be loss of all the limbs or loss of eyesight or one hand & one foot.

In such situations, the policyholder would get full sum assured from the insurer.

Permanent partial disability

It refers to such kind of physical injuries which result in the permanent partial incapacity of the policyholder. In such a situation, the policyholder may get sum assured up to 100 per cent of the total sum insured.

Temporary total disablement

If the accident has caused injuries that end in temporary incapacity and confinement to the home, it is known as Temporary total disablement. In such cases, the policyholder would get a weekly payment up to a prescribed limit. Such compensation is used to tide over the short term crisis like loss of pay and medical expenditure on treatment.

How much Personal Accident Cover do you need?

The sum assured permissible by the insurer is dependent upon lot many factors. These may be your monthly income, nature of the occupation, marital status, the number of dependents in the family, date of birth, pre-existing disabilities, and the number of members to be insured under a single policy, etc. However, the maximum sum assured that you may fetch around 72 times of your gross monthly income.

Why Personal Accident Insurance when you already have a term insurance?

You need to know that Personal accident insurance in itself is a specialised category of insurance. Hence, the extent of risk cover and customisation available under this is much wider than term insurance policy. On payment of additional premium, you may get Accidental benefit rider on a basic term plan. However, it would compensate you only in the event of permanent total disability. So, you will be left unprotected in all the other circumstances of temporary/partial disability.

Apart from that, personal accident insurance gives you a wider coverage at much lower cost as compared to term insurance plans. For an annual premium of just Rs 259, you could fetch a sum assured of as high as Rs 5 lakh. On the contrary, the same coverage would cost you around Rs 2000-3000 per annum in term insurance.

Also read: How to choose a good Term Insurance policy that suits you best

Thus, personal accident insurance helps in getting greater protection at a comparatively lower premium.

Why Personal Accident Insurance when you already have a health insurance?

Personal Accident Cover is far more superior than health insurance to cover the risk of accidents. Unlike health insurance, you need not undergo any medical checkups for personal accident insurance. Moreover, there is no waiting period in case of personal accident insurance.

Also, you may choose from a gamut of cover options to suit your specifications. These range from permanent and temporary total disablements to minor injuries, such as fractures and burns, which do not need any hospitalisation.


A health insurance policy may come handy in every situation. Suppose you meet with an accident and fracture your arm. It won’t require any hospitalisation. In such a scenario, health insurance won’t serve the purpose. On the contrary, personal accident cover may compensate for the expenditure incurred on such treatment.

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