What is Personal Accident Insurance?

12 May 2019

You can never predict when an accident can occur. You could be driving on the road, have a sports injury or simply fall off the stairs and be heavily injured. If you are the primary bread winner of your family, a fatal accident can jeopardize the financial future of your family. As, such, it is important for you to invest in a wide range of insurance policies that can protect you and your family in case of an accident that renders you permanently disabled, or one that causes an unfortunate death. Whether you own vehicle insurance, life insurance or even health insurance, you also need a special type of insurance that protects you against all sorts of accidents i.e. personal accident cover. If you're wondering what is personal accident insurance, you can read a detailed account of it below.

Meaning and definition of Personal accident insurance. what is it?

As is evident from the name, a personal accident cover (also known as IPA insurance) is an insurance product that providers legal and financial coverage against various types of incidents which may be defined or classified as accidents. Road accidents, falling and injuring yourself, accidents caused due to sports etc., are some of the common incidents that are classified as accidents.

People who invest in personal accident cover insurance policies become eligible for a different amounts of sums assured, based on the intensity of the accident, e.g., a temporary injury or a permanent one that can affect your livelihood. The insurance policy also provides financial protection to your loved ones if the accident causes the unfortunate death of the policy holder.

Coverage offered under personal accident insurance

Having explained what is IPA insurance, now let's find out the kind of coverage offered under this policy.

Your policy documents highlights all the scenarios and circumstances under which you can file a personal accident claim. Essentially there are 4 situations under which coverage is offered under this policy and a claim can be filed. They are:

1. An accident that causes total and permanent disability, thus preventing the policy holder from continuing his employment and bringing home a monthly income.
2. An accident that causes partial but permanent disability such a loss of sight, speech or even the limbs.
3. An accident that requires the policy holder to receive extended hospitalization.
4. An accident that leads to the death of the policy holder.

In case of long duration hospitalization, the policy holder receives cashless hospitalization. On the other hand, if the accident results in the unfortunate death of the policy holder, the individual listed as his/her nominee becomes the beneficiary and receives the sums assured.

Personal accident insurance vs vehicle accident insurance

Covering what is a personal accident insurance policy is not enough. You should also understand its importance versus other types of insurance policies that offer similar coverage; particularly bike or car accident.

Most people believe that if they already have bike or car insurance, they automatically qualify for personal accident cover. There are two issues with this assumption.

1. If you have a third party accidental insurance cover, then you receive legal and financial protection if you cause an accident. The beneficiary in this case is third party individual, his vehicle and/or property damaged in the accident and not you.
2. Even if you add a personal accident cover to your comprehensive vehicle insurance policy, it only protects you against road accidents. You are not eligible for coverage for anything else that is classified as an accident such as falling of the stairs, sports injuries or any other kind of accidents.

As such, having vehicle insurance is not sufficient because you are only protected against road accidents.

Final thoughts:

Now that you know what is personal accident insurance, remember to invest in this policy. This is a very specific policy that provides you with a good insurance amount in case of permanent disabilities, or worse death, while also protecting you and your loved ones financially. If you are the primary bread winner of your family, it is in your best interest to invest in this policy and secure the financial future of your loved ones.