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Insure against disability too, not merely death

Insure against disability too, not merely death

Rising number of accidents makes it essential to have a personal accident cover, even if you have term life insurance
What PA covers
A PA policy covers death, permanent total and partial disability, temporary total and partial disability, broken bones, burns and ambulance costs. In a disability, a certain percentage of the sum assured, depending on the extent. For instance, the compensation will depend on whether there is loss of one limb or both, one eye or two eyes, and so on.

There are add-on benefits such as repatriation of mortal remains, bonus for children's education, per-day benefits in case of hospitalisation due to accident, weekly compensation in case of loss of job of the earning member and so on.

There are floater plans that can be taken to include the entire family under a single policy, Mathur says.

Excluded
However, certain varieties of deaths and accidents can be denied under a PA. For instance, death due to natural causes or illness, suicide, self-inflicted injuries, alcohol, drugs or other intoxicants are not covered.

Some standard exclusions are injuries on account of civil or foreign wars, alcohol/drug influence, AIDS/HIV, duty with military/police force or a paramilitary body or from participation in unsafe sports.

Eligibility
The earning capacity and job are the primary conditions that determine the sum assured and premia. An application could get rejected due to physical deformity or a hazardous job profile. The risk classes are divided into Class I, II and III, with I being the lowest and III being the highest risk. For someone working in a factory, the premium would be the highest, slightly lower for someone in a sales job that involves travelling and still lower for someone with a desk job.

Today, PA covers are available with bank deposits, loans or credit cards. Some professional organisations take group PA covers for members. Many companies also provide it for employees. However, in these cases, the sum assured is usually low, starting with a few thousands and going up to Rs 5 to 10 lakh. Besides, these usually cover only death and not disability.

"You can have any number of PA covers and your family can claim benefits under all the covers, provided they are aware of it. The cover is available even if you travel to a foreign destination," says Gandhi of Emkay.

However, certain countries might have an enhanced risk due to reasons such as unstable political situations, high incidence of crime, epidemic proneness, etc. These factors might call for a rejection or premium loading, says out Kumar of HDFC Ergo.
courtesy : Business standard
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