Pay just Rs 800 more to upgrade car insurance personal accident cover to all-round 24X7 personal accident policy It usually costs between Rs 300 and 400. However, there are certain limitations when it comes to compulsory car insurance cover under car insurance. Meanwhile, a standalone personal accident cover protects you from any type of accident around the clock and around the world. The premium for a Rs 15-lakh personal accident cover can range between Rs 800 and Rs 1,200 in a year. Is it a good idea to spend a little extra and buy a separate standalone personal accident cover for a holistic coverage? Read on to find out
If you have a car and you drive it, it is mandatory to have a personal accident cover of at least Rs 15 lakh. This is the reason why many people take personal accident insurance of Rs 15 lakh when buying their motor insurance policy. Such personal accident covers under car insurance policies usually cover accidental death, partial disability, and permanent disabilities. It usually costs around Rs 400, depending on your motor insurance policy. Is it enough to protect you from any unforeseen accidents? Have you ever bothered to know how it works what it covers and what it does not? Is it a better idea to spend a little extra and buy a separate standalone personal accident cover which has a sum assured of up to Rs 1 crore? Read on to find out.What is a compulsory personal accident policy under car insurance and what does it cover?
What is a personal accident cover under a car insurance policy? There are typically three types of coverage people buy when taking car insurance, third-party cover, own-damage cover, and personal accident cover. Buying a third-party coverage is mandatory for all while buying an own-damage cover is optional. As stated earlier, it is mandatory to buy personal accident cover of Rs 15 lakh if you are the owner-driver.Now, let's understand what is covered under a compulsory personal accident cover in a car insurance policy. "It covers accidental death, loss of two limbs or sight of two eyes or one limb and sight of one eye, loss of one limb or sight of one eye, permanent total disablement from injuries other than named above," says Shashi Kant Dahuja - Chief Underwriting Officer at Shriram General Insurance. The sum insured is fixed at Rs 15 lakh across the industry, irrespective of the type of motor insurance you buy.
Personal accident policy under car insurance coverage:
Nature of injury
Scale of compensation
i. Accidental Death
100%
ii. Loss of two limbs or sight of two eyes or one limb and sight of one eye.
100%
iii. Loss of one limb or sight of one eye
50%
iv. Permanent total disablement from injuries other than named above.
100%
Source: IRDAI
"Some policies also cover temporary disablement, offering weekly benefits during the recovery period if the policyholder is unable to work due to accident-related injuries. Additionally, medical expenses incurred as a result of the accident, including hospitalisation and surgery costs, may be reimbursed," says Aftab Chaz, Associate Director and Business Head at Elephant.in, corporate insurance wing of Alliance Insurance Brokers.
In case you have more than one vehicle registered under your name, you can take a single personal accident cover under motor insurance, Dahuja added.
Compulsory personal accident policy under car insurance: How much does it cost?
How much do you need to pay for personal accident coverage under the motor insurance policy? "The premium of the personal accident cover under motor insurance will be based on the vehicle owned, sum insured opted, among others. "The cost of personal accident cover in motor insurance ranges between Rs 300 – 400," says Nitin Kumar, Head - Motor Insurance, Policybazaar.com.What are the limitations of a compulsory personal accident policy under the car insurance?
Do remember there are certain limitations when it comes to the coverage of personal accident cover under the motor insurance policy. It only provides limited coverage to owner-drivers when they are in their car. Explaining it further, Anshul Bohara, AVP – Pricing and Underwriting, Go Digit General Insurance, says, "It covers the owner-driver only in cases where an accident incurs when he or she is driving their vehicle or is travelling in their vehicle. This policy does not typically cover when an accident takes place when one is walking on the road or any other road accidents that take place when the policyholder is not driving the car."Further, personal accident cover under motor policy is usually covered only for owner-driver while driving the vehicle within India, says Dahuja. "Additionally, a geographical extension can be taken by the owner-driver including Bangladesh, Nepal, Bhutan, Pakistan, Maldives, and Sri Lanka."
Moreover, it does not cover any non-vehicle-related accidents.
Here comes standalone personal accident cover
Unlike the compulsory personal accident cover under motor insurance, a standalone personal accident cover protects you from any type of accident around the clock and around the world. "The standalone personal accident cover is typically in force 24/7 and is not limited to vehicle accidents alone for owner-drivers. The personal accident cover can protect you from all types of road accidents. This includes all road accidents that take place when you are driving your car, or you are in someone else's vehicle, or as a pedestrian, among others. It also protects you from other types of accidents like injuries or death due to accidental fire, accidental drowning, accidental fall, accidents due to force of nature like lightning, among others," says Bohara.How much does a standalone personal accident cover cost?
Premiums for standalone personal accident policies can vary widely. "Regarding the cost, it varies from insurer to insurer and depends on several factors, including age, occupation, sum insured, and the specific benefits chosen," says Rakesh Goyal, Director, Probus Insurance Broker.As you can see from the table, for a 35-year-old non-smoker, the premium for a Rs 15 lakh personal accident cover can range between Rs 800 and Rs 1,200 in a year. The premium for personal accident cover of Rs 50 lakh will cost around Rs 3,000 in a year.
Standalone personal accident insurance policy premiums compared
InsureriProtect Smart
HDFC Life Click 2 Protect Super
Max Life Insurance Smart Secure Plus
Tata AIA Life SRS Vitality
Bajaj Allianz eTouch
Accidental Death
Yes
Yes
Yes
Yes
Yes
Accidental Disability
No
Yes
Yes
Yes
No
Accidental Death Rider (Yearly premium)
Rs 15 lakh
Rs 1,032
Rs 876
Rs 1116
Rs 756
Rs 1020
Rs 30 lakh
Rs 2064
Rs 1776
Rs 2244
Rs 1488
Rs 2052
Rs 50 lakh
Rs 3444
Rs 2940
Rs 3744
Rs 2496
Rs 3420
Rs 1 crore
R 6900
Rs 5892
Rs 7476
Max Rs 50L
Rs 6828
Accidental Disability Rider (Yearly premium)
Rs 15 lakh
NA
Rs 504
Rs 3648
Rs 456
Rs 30 lakh
NA
Rs 1008
Rs 7284
Rs 888
Rs 50 lakh
NA
Rs 1668
NA; max is 30L
Rs 1448
Rs 1 crore
NA
Rs 3348
Max Rs 30L Max Rs 50L
Accidental Disability: In case the policyholder is permanently disabled due to an accident, an additional amount of Rs.10,000/month(1% of 10 Lacs cover amount) will be paid out for the next 10 years.
Accidental Disability: In case of Total and Permanent Disability due to accidental bodily injury or sickness or disease, this cover value will be paid.
Accidental Disability: Incase policyholder is permanently disabled or passes away due to an accident an additional amount will be paid out to the nominee
For a 35-year old male non-smoke, cover till 65 year; regular pay
Source: Policybazaar.com and ET Wealth Online
Do keep in mind the sum insured for the standalone personal insurance cover can even go up to Rs 1 crore, depending on the age of the customer.
Is a standalone personal accident better than a personal accident cover under a car insurance policy?
Standalone personal accident insurance offers several advantages over the limited coverage provided by motor insurance. It provides comprehensive coverage that goes beyond what motor insurance typically includes. "Additionally, these standalone policies offer the flexibility to choose a higher sum insured to meet individual needs, a feature often unavailable with motor insurance add-ons. Customisation options abound, allowing policyholders to tailor their coverage to include benefits such as accidental hospitalization, education grants, or modifications for partial disabilities," says Goyal."Moreover, some standalone policies offer a no-claim bonus, which can lead to reduced premiums for claim-free years. Another significant benefit is worldwide coverage, as many standalone policies protect individuals globally, not solely while driving. Lastly, these policies may come with additional perks like coverage for medical expenses, ambulance charges, and even loss of income due to accidents, making them a comprehensive choice for personal accident protection," he adds.
Key differences between personal accident under car insurance and standalone personal accident policy Personal accident under motor policy
Standalone personal accident policy
Fixed Sum Insured of 15 lakh
Maximum sum Insured is 120 times of monthly salary
No Maximum Age condition
Allowed only up to 70 Years of Age (varies from company to company)
Premium varies from company to company
Premium varies based on occupation, risk group and coverage selected
No risk group capping
Risk groups are defined
Coverage only when an accident occurs with the vehicle of the owner
Global coverage at any point of time
Standalone personal accident cover vs personal accident cover under motor insurance: Which one should you buy?
You need to evaluate your options based on your own circumstances. Compare premiums for both options, taking into account the coverage and benefits offered. "Assess your existing health and disability coverage. A standalone personal accident policy can provide an additional safety net if you lack such coverage," says Goyal. Assess whether the extra cost of a standalone policy is justified by the increased coverage and peace of mind. Consider your risk tolerance and financial situation. A standalone policy can provide more comprehensive protection and financial security in case of accidents.
Ultimately, the decision depends on your individual circumstances and priorities. "Whether one should buy a separate personal accident insurance policy or not, depends on the individual's circumstances and preferences. If the policyholder values flexibility, higher coverage limits, and additional benefits, a standalone personal accident policy may be a better choice," says Chaz. "However, if one has limited budget constraints and are satisfied with the coverage provided by their motor insurance, it might be sufficient for one’s needs. Ultimately, it's important to carefully review both options, assess their risk factors, and choose the one that aligns with their protection requirements and budget."
"It is always recommended that with a small amount of additional premium opting for a large sum insured will always be beneficial in terms of bringing down the financial strain and offering a sense of peace to the insurer and their families during any unforeseen situations," says Dahuja. A standalone policy with higher coverage may be prudent if you have a high-risk occupation or engage in activities that increase your accident risk.
Connect with Experts - Wealth creation made easy( Originally published on Oct 14, 2023 )
This story originally appeared on: India Times - Author:Faqs of Insurances
