Explained: What is a Personal Accident Insurance Policy and why is it important? , utility news

If the policyholder dies in an accident, the nominee will get full compensation. (Photo credit: Unsplash)

New Delhi: Nowadays, to protect ourselves and our loved ones, we opt for multiple insurance policies. Insurance helps us cover costs and other important aspects in case of an accident. One such important insurance is a personal accident insurance policy.

What is a personal accident insurance policy?

Personal accident insurance, as the name implies, is a policy that covers medical costs, and ensures that you will be compensated if any kind of disability or death occurs as a result of an accident. The insurer gets complete financial protection in case of any unfortunate event such as death, injury and temporary and permanent disability as a result of an accident.

If the policyholder dies due to an accident, the nominee will receive full compensation from the insurer. Other compensation is also offered for accidental disability such as loss of eyes, limbs and speech.

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Types of this policy

There are two types of personal accident insurance policies:

Personal Accident Insurance

It protects a person if any accidental damage occurs. This includes accidental death, loss of vision or limbs, or other disabilities that are permanent and caused by an accident.

group accident insurance

It is primarily used by employers to obtain coverage for their employees. However, this plan is very basic and generally offers limited benefits compared to the individual plan.

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Why should you take this insurance policy?

• If the policyholder dies in an accident, the nominee mentioned in the policy document will receive compensation. This will provide financial security to the family of the deceased policyholder. Compensation ranges from Rs 5 lakh to Rs 1 crore.
• Sometimes, an accident can leave a person permanently and completely disabled. In that case, the insurance policy pays an amount that depends on the nature of the disability. The policy also covers loss of eyesight, speech and hearing.
• Compensation can also be availed if the policyholder has partial hearing loss in one ear or loss of vision in one eye.
• Insurance covers other aspects such as education and employment benefits, and funeral expenses. Hospital charges which also include ambulance cost are included.