While most people have general understanding of Life Insurance and Health Insurance products, they are generally little informed when it comes to Personal Accident Insurance.
A Life Insurance policy covers the risk of death and a Health Insurance policy acts as a cushion against financial burden in the event of hospitalization.
Imagine a situation in which someone is rendered physically disabled following an accident. A Life Insurance is of use (to the victim’s dependents) only in the event of death and a Health Insurance plan would compensate only for the cost of hospitalization. Some Life Insurance policies offer Personal Accident riders, but these riders are not comprehensive. The consequences of meeting an accident could be serious, like death or pause in income, which could last from a few weeks, months to even years. What could help in such situations is a Personal Accident Insurance Policy.
A Personal Accident Insurance is a type of insurance which offers financial compensation in the event of bodily injuries leading to total/ partial disability or dismemberment resulting from an accident caused by violent, visible and external means.
This policy compensates the nominees even in case of death of the policyholder. It ensures the financial stability for an individual and his family if he/she is rendered temporarily disabled on account of an accident, thus plugging a major gap in one’s insurance portfolio.
Despite commonalities, the Personal Accident Insurance is different from Life Insurance and Health Insurance. Unlike Life Insurance, Personal Accident Insurance premiums vary with the policyholder’s occupation rather than age.
A Personal Accident Insurance is important for everyone, but it is more relevant for salaried individuals living in urban areas. Typically, salaried individual travel from home-to-office and office-to-home, every day, for months and years.
In such lifestyle, chances of death or getting hospitalized for some illness are lower than the chances of meeting an accident. Despite all possible precautions accidents do occur. This may result into disablement or loss of limbs or sometimes even death. In such situation, an Accidental Insurance policy is as important as a Life Insurance and Health Insurance.