Personal accident insurance is ...Read More
A personal accident insurance policy provides protection against death, permanent total or partial disability, and temporary disability in case of an accident. In case of death or permanent disability, the insurer pays a sum insured, and the policy terminates thereafter.
While in the case of partial disability, only a percentage of the sum insured is paid depending on the severity of disablement, whereas a weekly compensation is provided in case of temporary total disability. The personal accident insurance policy is renewable if the accident results in permanent partial disability or temporary total disability.
The personal accident insurance policy can be seen as an income protection plan where your profession and income determine your maximum cover and premium rates. Generally, you can get a maximum cover that is 10 times your annual income, and the premium rates usually depend on your profession. You can use online premium calculator to calculate premium based on your profession.
According to the Ministry of Road Transport and Highways (MoRTH), India reported 4,87,705 road accidents in 2024, out of which 1,77,177 were fatal. This represents an increase of 2.3% in road accident deaths as compared to 2023 (which saw 1,72,890 fatalities).
Additionally, news reports show that in 2024, approximately 485 road fatalities occurred every day on average. These statistics help us understand the high risk of accidents in India, highlighting the importance of personal accident insurance.
| Features | Included or not |
|---|---|
| Hospitalisation coverage | Yes |
| Medical coverage | Yes |
| Accidental coverage | Yes |
| Permanent/partial disability | Yes |
| Ambulance coverage | Yes |
| Support for child education | Yes |
High life coverat affordable premiums
Death Claims Paid Ratio99.8%^
Worldwide Claims
Coverage against64 critical illnesses@
Personal accident insurance protects you against financial losses from accidents. It provides financial support during death, disability, or temporary income loss. Here are the key reasons to buy a personal accident insurance policy.
Both life insurance and health insurance products cover for specific eventualities and provide coverage to mitigate the financial implications of the eventuality. At the same time, personal accident insurance offers additional coverage for a wider range of possible accidents. It can provide coverage for loss of limbs or disabilities caused due to an accident at the workplace or while travelling, etc. This insurance policy can help you create a financially stable environment against any possible eventuality.
Let us look at some of the key things covered under the personal accident insurance policy: -
A common rule of thumb is to choose personal accident coverage equal to 100 times your monthly income. If your monthly salary is ₹50,000, a cover of around ₹50 lakh can provide strong financial protection.
This amount can help your family repay loans, manage household expenses, fund children’s education (calculate estimate for childrens education), and maintain income stability in case of accidental death or disability.
5lakh
Term Insurance
10lakh
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20lakh
Term Insurance
25lakh
Term Insurance
30lakh
Term Insurance
50lakh
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Term Insurance
The personal accident insurance policy can be divided into two categories. Let us briefly talk about both types: -
This is the more common type of personal accident insurance policy, where the insured opts to cover themselves against uninvited accidents. The accidental damage cover includes accidental death, loss of sight or limbs, or other permanent disabilities resulting from the accident.
This type of personal accident insurance policy applies to a group of people who have something in common—be it employment type or location. Employers generally take these to provide coverage to their employees. Depending on the group size, the insurance company may provide discounts on the premium.
It is a good value-added advantage for small organizations as this policy is available at a low cost. However, this is only a basic plan and offers limited benefits compared to the individual plan.
Personal accident insurance is a useful policy to get financial assistance for yourself and your family in the event of an accident. This policy provides comprehensive coverage for accidental death or disabilities. Here are some of the benefits provided under this policy: -
Most personal accident insurance policies offer the benefit pay-outs for the dismemberment of any kind occurring due to an accident. The insurers have pre-determined percentages and ratios in which the benefit is paid to the policyholder.
This is an optional extra coverage under the personal accident insurance policy. And this additional insurance covers the possible dismemberment or death due to burns. The cost of treatment is reimbursed to the insured after hospitalization.
The insurance company reimburses all or part of the expenses incurred at the hospital. All the medical expenses, room rent charges, doctor’s consultation fees, medical tests, etc., are considered for reimbursement.
Some insurance companies provide daily cash allowance for the expenses arising due to hospitalization. This allowance to meet the unexpected hospital expenses can be given for up to 30 or 45 days of hospitalization.
Depending on the insurer, the policyholder may or may not be eligible for the education grants pay-out. An additional amount to be used for tuition fee payment for the dependent children is paid out to the policyholder. This is a common benefit provided by many insurance companies.
Under the personal accident insurance policy, some insurance companies also provide coverage for the cost of transportation of the mortal remains of the insured person.
For first-time buyers, it can be confusing to decide which type of insurance is necessary. Although life, health, and personal accident insurance are often discussed together, they serve different financial purposes.
Understanding their differences helps you choose the right protection for your financial planning. The following table shows a comparison of life vs health vs personal accident insurance coverage
| Parameters | Life Insurance | Health Insurance | Personal Accident Insurance |
|---|---|---|---|
| Purpose | Pays a lump sum to nominees in case of the policyholder’s demise | Covers medical costs arising from illness or injury | Provides financial protection against accidental death and accident-related disabilities |
| Coverage | Primarily offers a death benefit, with optional add-ons available | Includes hospitalisation expenses, doctor’s consultations, medicines, and certain preventive treatments | Covers accidental death, permanent total or partial disability, and temporary total disability |
| Payout Conditions | Paid to the nominee if the insured passes away during the policy term, subject to policy terms | Paid when the insured is hospitalised or incurs eligible medical expenses, as per policy conditions | Paid if the insured suffers injury, disability, or death as a result of an accident, subject to the policy terms |
| Recommended For | This policy is suitable for individuals who are the primary earning member of their family | It is advisable for individuals who are more likely to face medical issues and want protection against healthcare expenses | This cover is appropriate for those whose occupation involves a higher risk and may lead to hospitalisation due to the hazardous nature of their work |
| Key Benefits | Riders, such as critical illness or disability cover, may be added | Includes maternity benefits, wellness programmes, and cover for pre-existing conditions as per terms | Includes ambulance costs, hospital expenses due to the accident, and education support for dependant children |
Accidental insurance and Critical illness insurance are both designed to provide financial protection during medical emergencies, but they serve very different purposes. Accidental insurance focuses specifically on injuries, disability, or death caused by unforeseen accidents. In contrast, critical illness insurance provides a lump sum payout when the insured is diagnosed with a specified serious illness, regardless of how it occurred. The following table shows the difference between accidental and critical illness insurance
| Parameters | Accidental Insurance | Critical Illness Insurance |
|---|---|---|
| Importance | Provides financial compensation only if death or disability occurs due to an accident | Pays a lump sum benefit upon diagnosis of listed serious illnesses such as cancer, kidney failure, or paralysis |
| Coverage | Covers accident-related injuries and disabilities, but does not include illnesses or medical conditions | Covers specified major illnesses as defined in the policy terms |
| Features | Cashless settlement or reimbursement options are available | A lump sum benefit is paid upon hospitalisation and, in some cases, upon confirmed diagnosis, even before admission |
| Waiting Period | Does not involve a waiting period for accidental events | Includes a waiting period, often ranging between 90 and 180 days from policy commencement |
| Medical Checkup | Usually not required, depending on the insurer’s terms | Commonly required before policy issuance |
Exclusions refer to the provisions under an insurance policy that restricts coverage due to certain conditions. It includes the things that are not covered under the plan. The personal accident insurance policy also has some exclusions. Although personal accident insurance provides financial compensation for covered accidental events, certain circumstances are usually not covered. The specific exclusions differ depending on the insurers and policy terms and conditions, and therefore, it is advisable to carefully read the policy document before buying a plan.
Here is a general list of exclusions under the personal accident insurance policy: -
Filing a personal accident insurance claim promptly and correctly is essential to ensure a smooth settlement process. Since personal accident policies only cover injuries, disability, or death caused by accidents, insurers require proper documentation and timely notification to validate the claim. Understanding the standard procedure can help avoid unnecessary delays or rejections.
To file a reimbursement claim under a personal accident policy, you will generally need to submit the following documents
Personal accident insurance is primarily designed to provide financial protection against accidental death or disability. However, unlike health insurance, it does not offer tax benefits under Section 80D of the Income Tax Act. Premiums paid towards a standalone personal accident policy are not eligible for deduction under the old tax regime.
This is because Section 80D applies specifically to health insurance policies that cover medical expenses arising from illnesses or hospitalisation. Since personal accident insurance focuses on compensation for accidental injury, disability, or death, it does not fall within the scope of eligible deductions.
That said, the absence of tax benefits does not reduce its importance. The policy provides a lump sum payout in case of accidental death or disability, helping manage income loss, loan repayments, children’s education costs, and daily household expenses. Its real value lies in financial security during unforeseen emergencies, rather than in tax savings.
Personal accident insurance is usually offered to those who are eligible for buying an insurance policy as per their requirements. Although each insurer and each product has unique requirements, eligibility is usually dependent on factors like age, occupation, and other policy terms. Reviewing the policy eligibility conditions is important prior to the acquisition of a plan. Underwriting conditions or exclusions may also be introduced in the event you are employed in a high-risk job or engaged in risky activities.
Here are the eligibility criteria for the personal accident insurance policy: -
When it comes to selecting an appropriate personal accident insurance policy, it is important to assess your financial obligations, career, and coverage requirements. A close comparison of policy features can help you choose a cover that will bring significant benefits to your finances in the event of an accident.
Consider the following factors before purchasing a policy:
Comprehensive death benefit for your family member(s) in case of your unfortunate demise during policy term
Guaranteed maturity benefits/Income Benefit and accrued guaranteed additions to help meet your life goals
Multiple variants -lumpsum, short term income, long term. income, and whole life Income with unique benefits
Guaranteed Income benefit for 25 or 30 years after the policy period ends, as per the sub variant selected
Terminal benefit which equals total premiums paid, post completion of the payout period payable to nominee
Four premium payment options – 6, 8, 10 and 12 years to be chosen as per suitability of the plan for your needs
Option to receive the premiums paid back on successful survival of the insured till end of policy term
Death benefits for your family members in case of any eventuality leading to the loss of your life
Limited pay options to pay for term plans with return of premium - 5 Pay, 10 Pay, 12 Pay, 15 Pay, or 60 Pay
Yes, you can purchase multiple personal accident insurance policies. It is totally legal in India. With multiple insurance policies, you can haveextra protection from future eventualities. You can get the total of all the policies as per the terms and conditions of the insurance company.
The policyholder can claim the personal accident insurance policy by following these steps: -
In case of the unfortunate accidental death of the policyholder, the family receives the sum insured under the policy. This helps compensate for the family expenses, such as the children’s education.
To file a claim for the personal accident insurance policy, you should inform the insurer about the accident as soon as possible. This can also be done on the official website of the insurance company.
Yes, anyone can buy a personal accident insurance policy by submitting the required documents to the insurance company.
A personal accident insurance policy can help cover the treatment expenses arising from an accident. The policyholder can avail compensation in case of any permanent or partial disability.
The death, injury, disability caused due to the following factors are not covered in the personal accident insurance policy: -
A personal accident insurance policy is specifically designed to offer financial protection against injuries, permanent disability, or death resulting due to an accident. Moreover, substantial compensation is provided in case of accidents when travelling.
ARN NO: PCP/PAI/220124
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