Accidents are uncertain, and can cause irreparable damage to the individual. Hence, it is important to buy the correct sort of insurance to protect oneself against any such possible unfortunate incidents. Buying accident insurance is thus, an important financial decision.
Personal accident insurance policy covers the risks confronted by the buyer due to a fatal accident. It provides coverage for both death and disability caused as a result of the accident. Purchasing this insurance can give certain significant benefits, such as:
• If the person dies in an accident, the beneficiaries of the person would get some amount as death cover. This will provide much needed financial support to the family after the person's death.
• If the person sustains an injury because of an accident, a lump sum is paid for medical treatment. Even if the person does not face complete disability, for instance loses an eye, the personal will get a portion of the sum assured for covering medical expenses. A disabled person is also entitled to get a certain periodic sum, say a monthly remuneration, if the person is employed in an organization.
Things to look for in insurance policy:
While buying a personal accident insurance, the key factors to be considered are the number of years, amount of cover, and the benefits to the beneficiaries.
What all are covered under the policy: You should look for events leading to accidents. Know whether the type of accidents you are likely to face are covered by the policy. For example, see if the accidents apart from road or rail are included, such as fire accidents at home, accidents due to slipping on the steps of the apartment, etc.
Compensation amount: The payable compensation amount is also important. This, in turn depends on the size of the family, the risk involved, whether your spouse is working, etc. How much is payable on death, disability and minor disability should be examined. For example, know about the amount compensated for your family in case of your death, monthly remuneration for medical expenses, etc.
Percentage of benefit under permanent/temporary disability: Find the portion of the sum offered as the risk compensation. This depends on the accident resulting in death or disability (partial/temporary). For different conditions, varying amount is payable.
Exclusions and limitations: You should have a look at exclusions and limitations. These are significant as overlooking any of these could make your claim void under certain circumstances. Some of the common exclusions include:
• Persons aged above 75 years are not eligible to take this insurance • Driving under the influence alcohol or drugs would make your policy void • Injury caused by an existing infirmity or defect in the body • Accidents caused due to sports like polo, sky diving, professional diving, etc. • Accident because of war related events or riotous conditions • Full-time active service in the armed forces • Suicide or deliberate self-inflicted injuries • Criminal acts • HIV/AIDS
All these events make you forfeit the benefits. Hence, you should look out for any provision in this regard.
Things to look for in the insurance company:
Once you are sure of the details of policy, you should choose an insurance company having proven repute and experience in selling accident insurance policies, settling claims, facing financial legal challenges, if any. You should consider the following:
• Reputation and existence: Consider the reputation of the company in the market - how long it has been there in the market. As a thumb rule, a company is supposed to be there for not less than five years, in any case. Reputation is built over a period of time in terms of timely help to the customer.
• Claim settlement ratio (should be at least 75%): Insurance is for the long-term and the company should be strong enough to meet the demands of claims furnished by its customers. A benchmark is that the company should be able to meet a minimum of 75% in claims cases.
• Premium charged by the company: The premium charged should be reasonable and comparable with other insurance companies. Premiums may vary across the companies because of the benefits offered, duration of the benefits, etc.
Opt for a reliable brokerage firm to get best deals:
Once you decide to buy the insurance, you can purchase contacting the insurance company directly in person or through online. You can quote for their premium giving out the necessary details/specifications.
Another way of purchasing insurance is to go for a brokerage firm. This is indeed, the best option. This is so because, brokerage firms are experienced and knowledgeable enough to advise you the best deal in terms of amount of cover, duration of the cover, premium payment, claim settlement, document verification - that are involved in the whole process.
Consider these points, while buying personal accident insurance. These will help you buy an optimum insurance cover.
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