The insurance industry has evolved substantially in recent years. Started in the 1800s, insurance now covers a vast array of policies focused on specific subjects and events that may require special financial care. One such product is personal accident insurance that selectively covers damages caused by accident. Let’s learn about it in detail and know how it is essential for everyone.
What is a personal accident insurance?
A personal accident insurance is an annual policy wherein the insurance company provides compensation to policy holder, if the person gets injured, disabled or dies due to an accident. The coverage parameter for claims differ from company to company and the sum assured gained from this policy is completely tax-free.
How is it different from other insurance policies?
Policies like term insuranceand health insurancemight not provide compensation a particular accidental injury or loss. Whereas, accidental insurance not only covers injuries and treatments but also provides monetary cover for other miscellaneous purposes which includes monthly income.
Why do you need personal accident insurance?
It provides financial reimbursement to the policy holders for financial aid. This financial aid can help your family stay financially balanced for some time or finance the medical expenses. Unlike life insurance, this policy provides 24-hour assistance irrespective of your location. Some companies also cover loss of livelihood and impart the sum assured to the policy holder for financial stability. In case of death of the policy holders, this policy covers the funeral expenditures. Personal Accident Insurance also covers medical expenses of surgeries and correction surgery.
What it does not cover?
The benefits this policy offers may seem too good to be true but there are exceptions which should be considered before opting for it. Insurance company is not liable to pay any charges to the policy holders who belong to certain a profession that could pose a threat to life such as law enforcement, undersea diving, naval rigs, pilots or crew members, aircraft testers, racing drivers, fishermen, or high risk recreational persons who take part in bungee jumping, rock climbing and sky diving. Some other exclusions are death due to suicide, self-inflicted injury, provoked assault or murder and diseases like AIDS.
Accidents are unpredictable and can affect your loved ones too. Hence, it is necessary to keep financial backups like insurance policies for the betterment of your family.