Life is highly uncertain, and accidents can occur anytime. Therefore, one should remain prepared to face such unfortunate events. Accident insurance is a plan designed to avoid getting caught off-guard in the face of calamity. Most people, however, ponder whether it is necessary when they already have life and health insurance. This post will discuss the utility of accident insurance coverage and provide related guidance.
Meaning
Life insurance, health insurance, and accident insurance all serve different purposes. Life insurance provides financial protection in case of death, no matter its cause. On the other hand, health insurance covers expenses related to medical treatment in case of an illness or disease. Though some health insurance plans offer accidental riders, they are not as comprehensive as a separate accidental insurance policy and do not cover lost income.
Accident plans offer protection in the event of disability, injury, or death brought on by accidents like car accidents, rail wrecks, workplace mishaps, etc. They help with expenses related to medical treatment, rehabilitation, as well as lost income.
Need
Life insurance is suggested for a person who is the sole breadwinner of the family as it helps to share the family’s financial burden after their demise. While health insurance should be taken by people who are prone to medical conditions, accident insurance is the suitable choice for the following people.
- People involved in high-risk jobs.
- People who travel frequently.
- People who have an active lifestyle.
- Parents with small children.
- People who are not eligible for life or health insurance due to medical reasons.
- People who are seeking a cost-effective alternative to life insurance.
Types
There are two main categories of accident insurance policies available in the market. They are briefly discussed below.
Individual Personal Accident Insurance
More common among the two types, individual accident insurance is taken by a person to protect themselves against expenses incurred due to accidents. It covers accidental death as well as loss of limbs, vision, or other bodily functions.
Group Personal Accident Insurance
Group personal accident insurance covers a group of individuals related by location or employment type. These are typically taken by employers to offer coverage to their employees. The insurance provider may offer discounts on the rate depending on the size of the group.
Key Things Covered
A good accident insurance policy offers a broad coverage for expenditures like hospitalisation bills, ambulance charges, diagnostic tests, doctor’s consultation fees and also provides a daily cash allowance. Listed below are things that most insurers include in their accident programme.
Accidental Death Benefit
Severe injuries caused by accidents can even lead to deaths. In such a case, the insurer pays the entire insured amount to the beneficiaries under the policy.
Permanent Disability Cover
A predetermined percentage of the sum insured is paid to the policyholder if they suffer a permanent disability- complete or partial, such as loss of limbs.
Temporary Total Disability Cover
If the insured gets bedridden for some time due to an accident, they receive weekly compensation to offset the loss of income.
List of Exclusions
It is essential to go through the exclusion list before buying a policy, as it decreases the chances of claim rejection in the future. Given below are some injuries that most accident policies do not cover.
- Intentional injury
- Injuries due to dangerous sports
- Injuries brought on by drug or alcohol use
- On-duty injuries for military or police force
- Damages due to participation in violent protests
- Injuries while riding a two-wheeler over 150cc
- Sexually Transmitted Diseases (STDs)
- Pre-existing illness
- Harm due to pregnancy/childbirth
- War injuries
Conclusion
So, having an accident insurance policy in addition to a life and health insurance policy can provide more holistic protection. It will guarantee your family’s safety in the event of sickness or unintentional injury. However, before taking such policies, you should account for the premium costs that you will be obligated to pay. You can take an insurance agent’s help to know the rates and determine the adequate sum insured according to your budget.
