Because accidents can occur

According to the World Health Organization (WHO) statistics, India accounts for about 10 per cent of road accident fatalities worldwide. Considering the numerous road accidents in India, the outcomes could result in death of the victim or a situation, which sometimes could be worse than death—disability. While most of us have a life and health insurance policy, both have limited benefits in case you meet with an accident.

To address the risks that arise out of accidents, there exists personal accident insurance plan, which besides providing a death cover for the policyholder, also provides insurance cover for disabilities. To appreciate the benefit of this policy, understand a situation where an innocuous twisted ankle while walking down the stairs of your office could put you to bed rest for a week. You would be temporarily immobile, but it could be worse if you were to face a permanent disability.

A personal accident insurance is necessary for everyone. These policies broadly cover four situations— accidental death, permanent total disability (PTD), permanent partial disability (PPD) and temporary total disability (TTD). The payout in case of such policies is clearly stated in the policy document and depends on a medical certificate attesting the disability. For instance, accidental death payout of 100 per cent sum assured and for Permanent Total Disability means payout of 100 to 200 per cent sum assured.

In case of permanent partial disability, depending on the severity, the payout is defined and paid.The one feature where this policy scores immensely is the temporary disablement cover, where you stand to benefit from a weekly compensation, which protects you for loss of pay. So, if a fracture arising out of an accident results in a temporary total disablement, the policy benefits would pay the benefit at the rate per week for period of confinement, which is typically based on the income of the insured ranging from 1 per cent of the Sum Assured to Rs.50,000 per week—whichever is lower for a period of maximum 100 to 104 weeks, i.e. approximately two years. Given the fact that accidents can occur anytime, here is a policy that is just meant to address the financial implications arising out of an accident.

nk@outlookindia.com