Personal Accident Insurance Benefits

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Do you really need a personal accident policy, since you already have life, health and auto insurance? You may not feel the requirement to have a personal accident policy since you have been told that the existing insurance plans that you have can cover all the risks. But ask yourself, does the life insurance policy that comes a personal accident policy, as a rider be as effective as a standalone personal accident policy?
A standalone personal accident (PA) policy covers you at cheap premium rates compared to a life insurance policy. Also the personal accident policy gives you high and adequate coverage, include protection for loss of income and coverage for minor injuries, which may not be given in the accident rider that comes with life insurance policy. A personal accident policy thus covers disability that happens due to an accident, job loss and even accidental death at a much cheaper rate.
People who have take loans like mortgage loan, auto loan, and personal loan should take personal accident cover because it can offer protection towards repayment of outstanding balances at the time of any accident affecting the repayment capabilities.
In terms of pure accidental death cover, personal accident insurance beats term insurance policy as well. The term insurance cover can be Rs. 300 per 1 lakh while for personal accient, it is just Rs. 150-200 for a lakh as sum assured. You can take a combination policy and save money.
Personal accident covers include cover options from permanent and temporary total disablements to minor injuries, such as fractures and burns, which do not need any hospitalization. Tata AIG’s Maharaksha policy offers covers against everyday injuries and not only does it provide the hospitalization benefit, it also offers compensation up to Rs 1 lakh for inability to perform any of the three activities-eating, mobility, dressing.

How does Personal Accident Policy help with job loss?

Ideally, the personal accident cover should be 100 times your monthly salary. For instance, if your monthly salary is Rs 12,000 per month, the cover should be Rs 12 lakh. In your absence, the family can invest Rs 12 lakh (sum assured) in a fixed deposit to earn an interest of around Rs 8,000-Rs 10,000 a month-to manage the loss of income. It is better to buy personal accident insurance as a separate cover because the personal accident cover has lower premium rates and also the rider does not cover loss of income and other benefits.

Disclaimer
Be though with the documentation given in your personal accident insurance policy. There are exclusions too, for instance, accidents under the influence of alcohol or from dangerous contact sports are not covered.

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Posted by Starwin on 23rd April, 2010

Personal Accident Insurance Benefits

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