Crash cover

A nominal charge could insure you against accidental death or disability.

An accident related death occurs every 114 seconds in India. That's close to 3,00,000 deaths every year, with road accidents alone accounting for over 80,000. And yet, the number of people opting for accident insurance covers in this country of over a billion people is negligible "" less than 1 per cent.

Death is not the largest risk of an accident. There is a risk of total or partial disability. A "personal accident policy" is an annual policy that provides financial compensation in case of an accident leading to the death, permanent total disability, permanent partial disability and temporary total disablement of the insured.

Even if a person has a life insurance policy, provident fund, fixed deposits and assets, there is a still a huge gap between the financial cover needed and the cover available.

"A personal accident policy fills this gap. At a nominal premium of Rs 1,500 you insure yourself for Rs 10 lakh," says Nikhil Apte, zonal manage, west and central, Tata-AIG General Insurance Company.

What's the right size of insurance cover one must go for? It depends. According to Amol Phadnis, national manager underwriting, ICICI Lombard General Insurance Company, a person should opt for a sum insured that is 60-100 times the monthly income.

On additional premium, the policy can be extended to cover medical expenses, hospitalisation, emergency expenses, evacuation charges, cost of wheel chair, crutches, the works. In case your children are dependent on you, opt for an add-on covering their education and marriage.

Some insurance companies offer riders covering tuition fees of children till post-graduation, expenses for civil modification of the house to combat disability, and travel expenses for the family in case the insured meets with an accident in a foreign country.

No documents and medical tests are required for buying an individual personal accident policy. The premium rate varies from 0.045 to 0.3 per cent of the sum insured, depending on the occupation of the insured.

Workers in mines and explosive factories fall in the high risk category. Medium risk entails manual labourers, mechanics, drivers and on-site engineers. White-collared professionals like doctors, executives, office goers, teachers are classified in the "lower risk" category.

Natural death, suicide, self injury, AIDS, death-in-war, however, are excluded from the cover provided by these schemes since they're not crash-related.