While a personal accident policy is a simple product to understand, you need to understand the nitty-gritty before choosing one. One should read the policy wording and clauses carefully while keeping an eye on the percentage of payout promised in some cases. For example, in case of loss of one eye or limb, the claim disbursal might be restricted to 50 per cent of the sum insured. You can also choose to buy this cover in the form of a rider attached to your life or health insurance policy.
Factors you should consider while buying a personal accident policy:
1. Sum assured and benefits
It is important to select an appropriate sum insured by assessing your risk category and how prone you are to accidental risks. Sum insured should be selected on the basis of income, risk group and occupational hazards. Benefits in terms of coverage play a key role in selecting personal accident insurance.
For example, some policies pay weekly compensation in case of temporary total disability, while others make a payout only if the disability is permanent in nature. One should go with an accidental policy that has broader terms of coverage and benefits attached to an appropriate sum insured.
2. Worldwide Coverage
If you travel abroad frequently, worldwide coverage should be a must-have benefit in your personal accident insurance. This coverage is beneficial when one has a high risk of meeting with an accident due to his or her often visits abroad. There are various insurance companies which offer this benefit in their personal accidental insurance plan. Also, you can ask to include this benefit in your policy by paying a little extra.
One should always read the list of exclusions carefully and look for the covers which should be present in the policy because few exclusions can be covered by paying a little extra on premium. A list of exclusions is specified in the policy wording which is very important and before buying this policy, one should read it thoroughly.
4. Claim Settlement Process & Ratio
A hassle-free claim settlement process makes the policy appropriate and a good-to-go policy. One should read the claim settlement process specified in the policy wording. The claim settlement ratio of the insurance company should be checked before investing in the policy. Generally, there is a 30 days time period within which you have to intimate the insurer about the claim or hospitalization.
5. Add-on Covers
Personal Accident insurance has various ranges of extensions such as fractures, accidental hospitalization expenses, ambulance allowances etc. One of the most important extension covers is the child education benefit which adds value to a typical personal accident insurance policy. Assess your risk profile and include add-on covers that are highly required and affordable.
6. Type of Plan – Individual and Floater basis
Personal Accident is available on both individual and family floater basis. If you want to secure your family as well against accidental risks, the family floater is right for you and it saves cost and time because renewals are going to happen on the same date for everyone. An individual policy is good for those who indulge in risky adventures such as skydiving, a person who travels frequently must insure himself against the accidental risky proposition.
Although this policy has low premium rates, still one should always check that the policy is reasonably priced. There should be a perfect match between the premium charged and the coverage offered. It is quite an affordable policy and one should always look forward to adding extensions within affordability and limits so as to avail of its comprehensive benefits.
It is better to buy this policy at an early age since the risk of meeting an accident is higher at a younger age. Being at the start of your career, Personal accident should be the first policy in your risk management portfolio and if you are in a field job, it is the most important insurance to safeguard yourself against any mishaps.
These factors will put you on the right track and help you get protection against fatal injuries, accidental death, permanent total disability and total temporary disability due to accidents. This policy does not promise any returns during the policy tenure or at maturity, but compensation in case an accident leads to the life assured’s death or disability.
Buying a cover after evaluating the exclusions and sub-limits will ensure that you will not have to regret your purchase later. One should not stop to think of the major risk that can deal a body blow to finances during one’s lifetime- that is being disabled in an accident, affecting income flow etc. The only solution is to buy individual personal accident insurance and immune yourself and your family against the financial crisis at times of fatal accidents.