Accident Insurance: Various Facets And Its Importance
For most Indians, insurance plan means a life insurance policy or a health insurance policy. Very few are aware of an accident insurance policy. Those who are aware of it also brush it under the carpet on the grounds that they are covered by a term insurance plan or a health insurance plan or by both. However, even if you do have both the covers; you still need accident insurance. Here, we would understand what it is, its various facets and its importance.
What is Accident Insurance?
The unpredictability of life has grown by leaps and bounds today. If looked at realistically; you have less chance of falling sick than meeting with an accident while on the go. We hope not, but in case, you meet with a fatal accident; it can take away your life or leave you disabled to lead a normal life. The situation aggravates if you are the sole bread earner of the family. An accident insurance plays a critical role here and can mean the difference between life and death.
In layman’s terms, an accident insurance is a policy that guarantees you a fixed financial compensation in case of death or partial/total disability of the insured person due to an accident. The definition of accident plays a vital role here. The accident needs to be caused due to an external, visible and violent means, beyond the control of the insured.
Events Covered by an Accident Insurance
Also referred to as benefits; let’s decode the circumstance where you are eligible to get the compensation as defined by the plan.
- Accidental death- Whenever there is an instant death or death within a specified period due to an accident; the family of the insured receives the death compensation. Each policy has its own stipulated duration of death like six months or a year. It must be noted that no compensation is drooled out for natural death or sudden death due to any disease like a heart attack.
- Permanent total disability- Sometimes an accident robs you of your ability to work due to loss of essential body parts like loss of both limbs, eyes, hearing ability etc. This is called as permanent total disability and makes you eligible to receive a certain percentage of the sum assured which is decided by the terms and conditions of the policy. Here it may be pointed out that loss of one hand or leg is not considered as a total disability even though it is permanent.
- Permanent partial disability- Loss of one limb, eye, etc. due to an accident is referred to as partial disability. The policy has a specified amount for this condition as well.
- Temporary partial disability- When you get broken bones, temporary paralysis, etc. due to an accident and renders you incapable of working temporarily; then you get a pre-determined amount as compensation.
Apart from it, the accident insurance can provide coverage for other conditions as well, like medical expenses, corrective surgery, funeral services, etc. For each of the condition all requisite documents like FIR copy, medical documents and all other relevant documents.
Why buy an Accident Insurance Policy
Most of us have a health insurance plan which covers your hospitalization costs as well as a life insurance plan which pays compensation to your family in case of unexpected as well as expected death. The question is then why should you purchase an accident insurance policy.
The major difference is the situation in which the compensation is being paid. In life insurance, you get paid compensation only on death. But an accident policy compensates you not only when you are dead, but also when you are temporarily or permanently disabled due to any accident. This is a huge security blanket and can significantly lessen the financial impact.
Even if you compare it to health insurance, it edges superior. You are not required to undergo ant health checkup as in health insurance. Moreover, its waiting period is far lesser than the health insurance.
Thus, like health insurance and life insurance, you need an accident cover policy as well for a total protection.
Benefits of an Accident Insurance Policy
- Enhances the financial security of your family
- No tests or documentation required at the time of accident.
- Despite a low premium; it gives ample financial coverage.
- A simple and fast path of claim settlement.
- Cost of legal fees and funeral procedure is covered.
- You can customize the plan to your personal requirement.
- You can choose double indemnity for extra security.
Ways to get Accident Insurance Plan
There are numerous ways to get an accident insurance plan. Some of them are:
- Buy as a standalone plan.
- Buy it as a rider with any life insurance plan.
- Buy it as an add-on to your home or motor insurance.
- Get it added to the group insurance cover provided by your employer.
Preparing for the unexpected is the smartest move to take in life to emerge as a winner. An accident insurance plan is the exact trump card you put up your sleeve for added security. If you have not purchased it till now; you must get this protection cover on a priority basis.