We
all in our day-to-day life are exposed to risk of accidents. It is a
known fact that despite all possible precautions accidents do occur.
Accident may occur while walking, driving or even in the house due to
fall from stairs or in the bathroom etc. This may result into
disablement or loss of limbs or sometimes-even death. Knowing the fact
one’s endeavor that he/she or his/her dependents get adequate
compensation in the events of disablement or death.
To
cater the need the general insurance industry has devised an insurance
cover known as the Personal Accident insurance. The policy covers the
risks of accidental death and/or disablement and the cover is worldwide.
The policy provides compensation in the event of insured sustaining
injuries, solely and directly from an accident caused by violence,
visible and permanent total disablement, permanent partial disablement
or temporary total disablement.
Risks under Personal Accident can be classified as under:
1. Normal Risk
Accountants,
Doctors, Lawyers, Architects, Consulting Engineers, Teachers, Bankers,
Persons engaged in Administrative, Secretarial and managerial functions,
Shopkeepers, Shop Assistants not using machinery, Commercial travelers
and persons engaged in occupations of similar hazards
2. Heavy Risks
Persons
working in underground mines, explosives, workers involved in
electrical installation with high intensity power supply. Jockeys,
Circus personnel, Persons engaged in activities like racing on wheels or
horsebacks, mountaineering, winter sports, Skiing, ice hockey etc
persons engaged in occupations of similar hazards.
Being
insured against death is not sufficient: a disability caused by
accidents sometimes doesn’t allow you to work. Even if the disability is
temporary, you still need a cover to meet financial obligation during
hospitalization. It is here that personal accident policies come in
handy.
These
accident policies provide cover for groups too. In case of group
accidental policies, the insurer gives marginal discounts on premiums.
Scope of the cover
Permanent total disability:
Defined as permanent loss of use of any two limbs, or permanent and
complete loss of sight in both eyes or injuries that render the insured
incapable of earning an income from the date of the accident onwards
from any work, occupation or profession (commensurate with his
educational qualifications, training and experience).
Permanent partial disability: Defined
as permanent loss of any body part, one eye, one limb or one finger or a
toe or injuries that render the insured incapable of earning an income.
While the loss may be permanent, its effects on the insured and on his
life are partial.
Temporary total disability:
Defined as temporary loss in any form that may render a person immobile
or affect his earning capacity from the time of the accident. In other
words, a fracture in the arm or leg that keeps you from work qualifies:
you may be mobile but the injury may not support your ability to work.
Permanent Partial Disablement: The
sight of one eye, or of the actual loss by physical separation of one
entire hand or of one entire foot, fifty percent (50%) of the Capital
Sum Insured stated in the schedule
Total and irrecoverable loss of use of a hand or a foot without physical
separation, fifty percent (50%) of the Capital Sum Insured cited in the
Schedule
‘Physical Separation’ means amputation at or above the wrist and/that of the foot at or above the ankle respectively.
Permanent Total Disablement: At any time during the
currency of the policy, the insured sustains any bodily injury resulting
solely and directly from accident caused by external violent and
visible means.
- If
such injury, within 12 months of its occurrence, be the sole and direct
cause of the death of the insured, the capital sum insured as stated in
the schedule.
- If such injury within 12 months of its occurrence be the sole and direct cause of the total and irrecoverable loss of:
- Sight
in either eyes or actual loss by physical separation of both hands or
feet or one entire hand and one entire foot, loss of sight in one eye
and loss of one entire foot or one entire hand-the capital sum insured,
stated in the schedule of the policy.
- Loss
of both hands or feet or one hand and one foot, or of loss of sight in
one eye and loss of use of one hand or one foot, the capital sum insured
stated in the schedule of the policy.
3. If such injury within 12 months of its occurrence be the sole and direct cause of the total and irrecoverable loss of:
- Sight
in one eye or actual loss by physical separation of one entire hand or
one entire foot- 50% of the capital sum insured stated in the schedule
of the policy.
- Total and irrecoverable loss of use of a hand or a foot without physical separation - 50 per cent of the capital sum insured.
4. If such injury shall as a direct consequence permanently, totally
and absolutely disable the insured from engaging in any employment or
occupation of any description whatsoever- lumpsum equal to 100% of the
capital sum insured.
5. If such injury shall within 12 months of its occurrence be the
sole and direct cause of the total and irrecoverable loss of use of or
the actual loss by physical separation of the following, then the
percentage of the capital sum insured as indicated below, shall be
payable. This benefit is called permanent partial disablement
benefit.
6 . If such injury shall be the sole and direct cause of temporary
total disablement, then so long as the insured shall be totally disabled
from engaging in any employment or occupation of any description
whatsoever- a sum at the rate of one per cent of capital sum insured per
week but not exceeding Rs 3,000/- per week. This benefit is known as
temporary total disablement benefit.
Compensation
payable under sub-clause (f) shall not be payable for more than 100
weeks in respect to a person’s injury calculated from the date of
commencement of disablement and shall not exceed the capital sum
insured.
Payment under this sub-clause (f) shall not be made until the total amount of compensation is ascertained and agreed upon.
Note:
If any such injury as mentioned above shall result in the inability to
remain gainfully employed, then the Capital Sum Insured payable will be
100%.
Terrorism and Acts of Terrorism
In
case of the death of the insured arising out of terrorism or acts of
terrorism within the policy period, the nominee (mentioned in the
policy) is compensated with the sum Insured. The Company shall also pay
compensation against permanent and total loss of limbs, sight etc. (of
the insured) arising out of terrorism or acts of terrorism.
Exclusions:
There is some exclusion in the Personal Accident Policy:
- Intentional self-injury, suicide or attempted suicide, general disease or instantly.
- The Insured being under the influence of intoxicating liquor or drugs.
- Death or disablement resulting from pregnancy or child birth (in case of female insured)
- The insured committing any breach of law with criminal intent.
- Engaging
in aviation activities other than traveling as bonafide passengers (in a
duly licensed standard type of aircraft) any where in the world.
- War and Allied risks.
- Nuclear Perils.
- Service on duty with any armed forces.
Pregnancy Exclusion Clause
Insurance
under this policy shall not extend to cover death or disablement
resulting directly or indirectly caused by, contributed to/or aggravated
or prolonged by child birth or pregnancy or any consequence thereof.
Insurers broadly put disability into three categories.
Territorial Limits
The
cover provided under Personal Accident Policy is worldwide. However the
claims are payable only in Indian Rupees (If the policy is taken in
India)
What should the Insured age be?
Normally
the cover is restricted to persons between the age of 5 to 70 years for
both male and female. Cover beyond these age limits can be had at
higher rates of premium as under.
Renewal
of the policy above 70years of age but up to 80years is subject to
loading of 5%on the premium. Fresh proposal above 70years but below
80years is subject to a loading of 10% on the premium. No medical
examination is to be insisted for a and b.
Extensions of the policy:
1. Medical Benefits Extension
A
policy can be extended on payment of extra premium to cover medical
expenses incurred by the insured in connection with injury, provided the
claim for the injury is admissible under the policy. The extension is
available by loading the premium either by 10% or by 25% and the benefit
available is reimbursement of Medical expenses
2. War and Allied Risks
War
and allied risks are exceptions under the policy. But in respect of
Indian personnel/Experts working in foreign countries on Civilian duties
‘this exception may be deleted on payment of additional premium.
3. Special Additional Benefits
Effective
from April 10, 1989, a new clause called Children’s’ Education Fund has
been incorporated under the PA policy. Under this clause:
- If
the insured person has one dependent child below the age of 23 years,
an amount equal to 10% of the CSI subject to a maximum of Rs 5,000.
- If
the insured person has more than one dependent child below the age of
23 years, an amount equal to 10 per cent of the CSI subject to a maximum
of Rs l0,000.
