What is Personal Accident Cover?

An accident could occur anytime anywhere unexpectedly. At work, home, travel or the road, it almost renders us helpless with its grave consequences. The trauma of having met with an accident is almost always coupled with financial losses; of getting treatment, or coping with a loss of income, if any. Does insurance have a solution to meet this uncertainty? A personal accident insurance cover is the answer.

Consequences of a Serious Accident and the Need for a Cover

A serious accident could come with serious consequences. You face hospitalization and medical treatment, plus the risk of disability and loss of income or job.  The need for a personal accident insurance stems from this. Where a life insurance policy provides financial assistance to cater to your family’s needs in case of your unexpected death, the above mentioned risks, of hospitalization, disability or loss of income do not come under its scope.

A personal accident cover is an insurance policy that gives complete protection against these consequences of an accident. It not only covers death due to accident, but also pays towards medical expenses for treatment and for any disability. It also reduces financial constraints that may arise out of loss of job or income, in case of disability.

Personal Accident Cover at a Glance

A personal accident insurance covers any injury caused directly by an accident that results in death or disablement, temporary or permanent. From minor accidents that may cause fractures or burns to major accidents on road or rail that may cause disablement or physical cripple, the policy would cover it.


Personal accident insurance covers only accidental death. In other words, if death were to occur due to any other health reason, the policy would not be paying you a benefit. The disablement the policy would cover could be in the nature of permanent total disablement, permanent partial disablement or temporary total disablement.

  • permanent total disablement is when the injury inflicted is total, irrecoverable and prevents any sort of engagement in day-to-day occupation.
  • Permanent partial disablement is a bodily injury that is total, irrevocable,with continuous loss of or impairment of a body part or sensory organ.
  • Temporary total disablement is the bodily injury that prevents you from engaging in any occupation for a certain period (not exceeding 104 weeks) where you are rendered unable to work and earn money.

Permanent Total Disablement

  • Loss of the sight of both eyes.
  • Physical separation of or the loss of ability to use both hands and both feet.
  • Physical separation of or the loss of ability to use one hand and one foot.
  • Loss of sight of one eye and the physical separation of or the loss of ability to use either one hand or one foot.

Permanent Partial Disablement

  • An arm at the shoulder joint
  • An arm above the elbow joint
  • An arm beneath the elbow joint
  • A hand at the wrist
  • A thumb
  • An index finger
  • Foot at the ankle
  • A large toe
  • An eye
  • Hearing of one ear

Temporary Total Disablement

  • A bed rest for 3 months
  • Fracture in hands or legs

What a Personal Accident Insurance Policy Gives You?

Having clearly established that a serious accident could be quite devastating, the need for a personal accident policy is of importance.  The policy features various benefits. Here’s a look at what you get out of your policy.

  • The sum assured:

The policy offers a pre-determined sum assured to cover the accidental death and disablement. This sum assured is determined at policy inception, taking into consideration your age, income, and your occupation.

  • Affordable premiums:

Premiums on personal accident policies are generally far lesser than other insurance schemes. The unique part of a personal accident policy is that the premium is predominantly dependent on your occupation and place of stay, rather than on age.  The riskier your job and the more crowded your place of residence, the higher risk you would be exposed to. So for a person working in a mine, or electrical installations, the risk would be much higher than a software engineer, thus commanding a higher premium.

  • Option of individual or family cover:

Insurance companies offer an option of an individual cover, covering a single individual or a more comprehensive family cover for dependent spouse and children.

  • Cumulative bonus:

Very similar to health and motor insurance policies, you could expect a cumulative bonus on claim free years. From 5% per claim free year to a maximum cumulative bonus of 50%, this bonus varies from insurer to insurer.

  • Additional benefits:

Apart from the basic benefits, insurance companies may offer some additional covers such as an education fund for children. The education fund sponsors the education of upto 2 children in case of death or disablement. This amount is either paid as an additional lump sum amount or as a percentage of the Sum Assured. Additional benefits may also include ambulance benefits, hospital cash allowance and family transportation benefits.

  • Worldwide coverage:

A personal accident plan does not apply any territorial restriction in coverage. So the policy would cover an accident anywhere in the world. Claims however would be paid in Indian Rupees only.

The Scope- What’s in and what’s out                           

A personal accident cover insures any accident by:

  • Rail, road, or air
  • It covers death and injuries caused in an accident or collision
  • Policies also cover, fractures burns, injuries inflicted due to animal bite, poisoning or drowning.
  • A few policies these days also cover accidents or injuries inflicted in acts of terrorism

What’s excluded?

  • Injuries inflected intentionally by self
  • Suicide or attempted suicides
  • Death or disablement as a result of child-birth and pregnancy.
  • Accidents that have occur when under the influence of alcohol or intoxicating drugs.
  • War and allied peril
  • Dangerous sports
  • By committing any breach of law with criminal intent

Claiming Benefits

The sum assured is paid out on filing a claim in the event of accidental death or injuries. Depending on the policy and the cover opted for insurance companies settle claims on satisfactory evaluation of documents. The following document would be required.

In case of accidental death:

  • Post-mortem report
  • I.R./Police report
  • Report of doctor or hospital
  • Death certificate

For accidental injuries

  • The duly filled claim form
  • Medical examiners report about the extent of injuries from the accident.
  • Reports and details on the treatment undertaken at hospital.
  • Certificate from the employer to the effect that the Insured was on leave during the period.

Opting for the Cover

  • The age: A personal accident cover is available for individuals between the ages of 5 to 70 years. In family covers, the age of dependent children is restricted between 5 to 19 years.
  • Duration of policy: The policy is generally for a maximum period of one year only. Further to this, it would have to be renewed annually.
  • Rider versus policy: Personal accident covers could be opted for as a rider along with a health cover, or as a complete insurance policy. The choice depends on your individual requirement. For those on the move a personal accident policy would be an ideal choice. If your job entails you to extensive travel by air, road or air, you sure are exposed to a higher risk of an accident. A policy with its enhanced benefits, would thus give you the much needed peace of mind. It assures you protection in case of death or disability. Riders on the other hand, are limited in their benefits. Generally offered along with life insurance plans, riders may or may not cover hospitalisation expenses. So the choice predominantly lies with what your requirement is.

Remember: A personal accident cover does not offer any maturity or tax benefits.