Term is not enough, buy personal accident insurance cover too: Expert

These policies prove especially useful in case of a disability

The Insurance Regulatory and Development Authority of India (Irdai) recently proposed amendments to regulations to allow lifelong renewability of personal accident (PA) policies. This will come as a relief for senior citizens, who were often deprived of a PA cover as policies ceased after a certain age.

PA policies of different companies, including Saral Suraksha Bima, typically cease after the age of 65-70. Group PA policies cease even earlier. Even the Pradhan Mantri Suraksha Bima Yojana, which pays Rs 2 lakh in case of accidental death and Rs 1 lakh in case of accidental disability, ceases at the age of 70.

“The proposed regulation will provide policyholders control over renewal. It will ensure hassle-free protection and enable people to meet the financial liabilities that arise after an accident,” says Rakesh Jain, chief executive officer (CEO), Reliance General Insurance.

PA cover a must
Irdai’s move brings to the fore the need for greater penetration of PA policies in a country that has a high rate of accidental death and disability. “PA insurance offers comprehensive protection against accidents. It provides compensation in case of disability or death caused by an accident. It also reimburses medical costs,” says Naval Goel, founder and CEO, PolicyX.com.

What is covered?
A PA cover provides financial protection to the insured and their family members in case of accidents that cause bodily injuries, death due to an accident, permanent total disability, temporary total disability, and permanent partial disability.

Today’s policies cover several additional risks, too. “PA policies provide EMI cover, and fracture and coma cover. They also cover the risks people are exposed to while participating in adventure sports. In addition, there is a feature called children’s education bonus, which covers the fees of the insured’s children up to a certain amount and for a certain time period, depending on the policy terms and conditions,” says Gurdeep Singh Batra, head, retail underwriting, Bajaj Allianz General Insurance.

Batra says both annual and long-term covers are available. He adds that coverage starts right from day one, with no waiting period. These policies also provide co­mpensation for out-of-pocket expenses incu­rred due to an accident. 

Everyone needs a PA cover
Jain says a PA cover should be purchased by everyone, irrespective of age, occupation or health condition, as one does not know when an accident could occur, causing hardship to the family.

Batra agrees. “Everyone should buy this policy, especially given the ever-increasing number of road accidents in our country. People whose jobs involve a lot of travelling, or those who do a lot of leisure travelling, must buy this policy. With the rise in adventure tourism, even the tourism department of India emphasises the need for a PA cover before opting for adventure sport activities,” he says.

Buy minimum Rs 10 lakh cover
Buying adequate sum insured is important. “Since it is difficult to assess the severity of an accident in advance, one should buy at least a Rs 10 lakh cover,” says Goel.

Jain advises opting for the maximum sum insured one is eligible for.

“Those who travel, especially vehicle owners and drivers, should purchase a cover equivalent to 100 times their monthly income. The sum insured starts from Rs 5 lakh. How high a cover one can buy depends on eligibility criteria, such as the insured’s occupation,” says Jain.

Check out features
Buyers need to assess the features offered by various PA policies before purchasing one. “Besides affordability of premium and network hospitals, the buyer must also check the additional features provided by an insurer, such as coverage for broken bones and burns caused by an accident. Having an ambulance and hospital cash benefit would be an advantage. The plan must also cover casualties that occur abroad,” says Goel.

Adds Jain: “Check if the insur­er provides bonus sum insured, reimbursement for medical expenses, education fund for children, and a hassle-free claim procedure.”