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Personal accident insurance – Should you opt for it?

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“Risk comes from not knowing what you’re doing”

Warren Buffett

personal accident policyTrue……but not always.

In our lives, there are thousands of situations, where we know what we are doing, however we cannot avoid risks. Imagine someone crossing the road on a pedestrian signal, and a drunkard hits him. The pedestrian could not avoid the risk despite following the traffic rules.

Risk is inherent in all our activities. In our last interaction, we had discussed how you could select a life insurance policy to cover the risk of death and a mediclaim policy as a safeguard against hospitalisation expenses. However, most of you must be familiar with these risk covers; but very few would have heard about personal accident insurance cover. Let us discuss this today!

Personal Accident Insurance denotes an insurance cover, which proposes compensation in case of death, bodily injuries, total/ partial disability or mutilation resulting from an accident. The types of events that are covered under personal accident insurance are rail, road and air accident, injury due to collision or fall, burn injury etc.

Your insurance portfolio would be incomplete without a personal accident policy. This type of policy provides financial support to the policyholder if he is disabled after an accident. Even minor accidents are covered by the policy such as breaking a leg or arm, falling from a cycle etc.

Where to buy?

All general insurance companies (ICICI Lombard, HDFC ERGO, Royal Sundaram, Apollo Munich, Tata AIG, etc.) offer these policies. The agents, however, don’t try to pitch these policies much as these are quite low priced policies with lesser commissions.


These policies cost you a low amount of premium for a decent cover. It costs you around INR 100 – INR 200 per lac of sum assured.


The situations covered by personal accident policies are:

Death – In case of a death due to accident, the policy pays 100% of sum Assured to the nominee. Some companies also pay “Children’s Education Bonus” of 5000 or 10000 for a maximum of two children.

Permanent Total Disablement (PTD) – In a situation when the insured is disabled for life, the entire sum assured is paid. Some policies also pay 125% or 110% of SA depending on terms and conditions of the policy.

PTD includes loss of –

  • both hands or both feet

  • one hand and one feet

  • one (hand or foot) and an eye

  • loss of sight of both eyes OR speech OR Hearing of both ears

Permanent Partial Disablement (PPD) – In this case, a small percentage of SA is paid on weekly or monthly basis, i.e. 1% of sum insured is paid every week up to 100 weeks.

Includes –

  • Loss of Index Finger or thumb

  • Loss of hearing in one ear

  • Loss of one eye

  • Loss of one limb

Temporary Total Disablement (TTD) – In case the insured is not able to work due to the accident, for some weeks or months, the company will pay a part of SA.

Group and family accident policies are also available in the market where cover is available for the whole family / group under a single policy.

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