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Accident insurance can show up when life, health covers fail

Rising number of vehicles hitting the road and subsequent incidence of accidents are alarming; is there a safeguard to protect you financially in case of an accident?

Published: 18th June 2018 01:33 AM  |   Last Updated: 18th June 2018 06:25 AM   |  A+A-

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Express News Service

HYDERABAD: Rising number of vehicles hitting the road and subsequent incidence of accidents are alarming; is there a safeguard to protect you financially in case of an accident?

While many consider ‘life insurance’ or ‘health insurance’ as answers to face an unfortunate instance of road accident, they are not aware that both these insurances provide insufficient cover in such a case. Here is where the ‘Personal Accident (PA) Insurance’ comes into play.

While life insurance offers cover in case of death, and health insurance is useful in case of hospitalisation and other health expenses, personal accident insurance offers cover in case of death or damage to a body part in case of an accident. Thus, the accident insurance addresses a need that is unmet by life and health insurances.

“If a person meets with an accident, health insurance covers hospitalisation expenses. In case of death, life insurance is there to protect the financial needs of the dependents of the insured. However, if the accident leaves one disabled, health and life insurances are not sufficient to protect the insured. This is when personal accident can be useful. It not only covers one against death, but also financially supports in case of partial or complete disability, by paying a lump sum amount. Hence, it is important to buy a PA cover to fill the gap left by health and life insurances,” explains Vaidyanathan Ramani, Head (Product & Innovation), Policybazaar.com.

Besides providing coverage against death and disability, PA insurance is designed with a motive of providing financial support to the insured, as after the accident, one’s earning capacity may completely or partially decrease. Hence, while buying PA cover, it is important to check that PA insurance policy provides maximum cover for permanent and partial disabilities and is enough to meet one’s daily needs.
The awareness about PA insurance is quite less, but the fact is that it is much cheaper than other insurances. Even the Union government has come up with an accident insurance scheme, Pradhan Mantri Suraksha Bima Yojana, which provides coverage up to Rs 2 lakh for a premium as low as Rs 12 per annum.        
“Keeping in view the increasing number of vehicles coming onto the roads and rising accident cases, PA insurance has become a necessity today. It is essential not just to protect an individual’s financial health in case of an accident, but also to strengthen one’s financial planning,” said Hanu Yedluri, financial advisor, who is also the Founder and CEO of fintech company InstaEMI.

“I can say without hesitation that without a personal accident cover, one’s financial planning is not complete. While some life insurance policies provide PA cover with a rider, after paying some additional premium, it is advisable to buy a full-scale PA insurance policy from general insurance companies, as there are many well-designed PA policies on offer in the insurance market now,” he stressed.

Why Personal accident cover is A must:

  • PA insurance provides cover in case of partial or permanent disability.

  • The cover addresses the needs unmet by life and health insurances.

  • The premium for PA insurance is generally lower.

  • PM Suraksha Bima Yojana offers accident cover for as low as J12 per year.

  • According to missionroadsafety.com, an IIT Delhi initiative, every minute a road accident happens in India.          

  • Union Ministry of Road Transport and Highways data reveals that 83.3% of persons injured or dead in accidents are in the working age group of 18-60.

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