Recently one reader of this blog raised an interesting question. He asked me, what is the necessary when we have health insurance and any hospitalization due to accident also be covered under health insurance? Looks great but in reality health insurance and accidental insurance are two different products meant for different requirement. So let us discuss about this today.
These days there is huge buzz about buying term plans online. At the same time few go ahead and buy health insurance too (even if employer providing them). But there is less knowledge spreading about accidental insurance which is most cheapest than the other two mentioned products.
What is Accidental Insurance Policy?
These policies are like health insurance policies which means it will be yearly contract between you and insurance company. Unlike Term Insurance where insurance companies offer maximum around 20 times of your yearly income, here in accidental insurance it actually depends on company to company and also your profession matter utmost here. If your profession is more prone to accident, then insurance companies may offer less sum insured or may raise premium. Also one more interesting point that differs from life and health insurance is, here your premium is not fixed on your age, but the profession you are into. So these policies will come into picture when you met with any accident. Accident in the sense sudden, unforeseen or unexpected.
Usually your profession is divided to different categories to arrive at premium.
Level 1- Administrative/managing functions, accountants, doctors, lawyers, architects, teachers or software engineers etc.
Level 2-Manual labour, garage mechanic, machine operator, paid drivers, cash carrying employee, builder, contractor, veterinary doctor etc.
Level 3-Workers in underground mines, electric installations with high tension supply, circus performers mountaineers, professional river rafters etc.
So any effect to your body due to accident is covered in such policies. But such accident must not be suicide, self injury or war etc. Below are the benefits covered under accidental health insurance policies.
Death–If death occurs due to accident then full sum assured will be payable to nominee. Do remember that in case of life insurance your nominee will receive equal to sum assured in case of death due to natural or accidental. But in case of accidental insurance your nominee will receive sum assured only in case of accidental death but not normal death.
Along with this sum assured payment, in few policies you will receive children education bonus which is around Rs.5,000 per child (maximum 2 children) or 10% of sum assured whichever is lower.
Permanent Total Disablement-Due accident if insured disabled for life then you will receive equal to sum assured or in few products around 115% to 120% of sum assured. Example of such accidents are like loss of both hands or legs, loss of one hand and one leg, loss of limb (hand/foot) and an eye, loss of sight of both eyes, loss of speech and hearing of both ears etc.
Permanent Partial Disablement-As name itself suggests, if someone met with permanent partial disability but not like permanent disability as said above then insurance companies will pay you some % of sum assured depending on the case. Usually definition of permanent partial disability changes from insurer to insurer. Hence the % of payout will also differ.
Temporary Total Disablement-In some cases you met with accident with minor injuries where your doctor may suggest for few days or week bed rest to recover fully. In such situation insurance companies will usually pay some % of sum assured as benefit. Again this definition changes from company to company.
Other than above said features, you will also find some interesting offers from insurers like family discounts, cumulative bonus for each claim free year, medical expenses or hospital confinement allowance. Few companies offer this policy to non earning persons also.
Tax Benefit of buying Accidental Insurance Policy– There is no tax benefit under current income tax law to claim for deduction. But I have not got a clear ruling whether the claim received from such policies will be exempt from tax like life insurance. Let me find the real rules on the same and will update.
Below I tried to find out and do some comparison of available accidental insurance plans in India. List is not exhaustive and few options I am unable to find. Hence I am sharing with you whatever I found. For detailed features and quotes I suggest you to contact individual insurance company. Below premiums are for Level 1 professionals.
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View Comments
Is it more cost effective to get standalone personal accident insurance or include it as a rider while purchasing life insurance policy?
Dear Cautious,
Better to buy standalone.
Thanks for your prompt response. I was looking into some of the policies available & was surprised to find that only Apollo Munich & Religare give policy of 50L SI. The cost quoted by Religare for individual policy is very much higher than the cost quoted by Apollo for a Self+Spouse+Child policy. Is there a catch here that I am missing or Apollo is ahead of the competition?
Sir waiting for updated accident insurance list (and its importance for mech/elect/chem engg.) of this year because could not find bharti axa personal accident on their website..plus please describe in post "The difference between personal accident rider vs seperate personal accident policy" differences because riders are very cheap compared to separate policy...and this need to renew after 3 years as i know from max bupa website.
Dear Maunish,
Bharati Axa definitely offering the product. Please check with them. When you buy as a rider, then the benefits are limited and proportional to sum assured you opted in Life Insurance, which is not the case with standalone accidental insurance.
Sir,thank you for yor prompt response....will there be any updated version of this year?
Dear Maunish,
I will update you soon.
I have mentioned that i will smoke and drink alcohol in term plan. After conducting the all medical tests they have issued the term policy from aditya birla. my existing policy is one year old. this i am looking to change to split the same SI as two 50 lakh plans. One is from Max online term plan and Aegon term plan, to have spousal cover.
In my existing plan of aditya all medical reacords are OK. now i will try to switch before 2 months of renewal i will go ahead if i didnt get the policy i will continue with my existing plan only.
If in vcase of death due to smoke/Drinking, If doctor mention the same in reports is my nominee will get the claim? even i have disclosed to the insurer?
Dear Rajesh,
Yes.
Dear Sir,
My salary is 14 lakh CTC per Anum
1. I am 38 years old, my spouse is 29 years,My kid is 3.5 years old.Currently i am having 5 lakh Helath plan from appolo munich( Optima restore) other than corporate plan. including No claim Bonus 7.5 lakh
2. 1crore term plan from Aditya birla ( ) 30 lakhs accidental death rider.
3. Having Individual Critical Illness plans for my wife and my self from Max bupa ( 1O lakh SI)
3. Seperate health plan for mother from Cigna TTK 4.5 lakh SI and Cancer care policy for my kid from Future genrali.
4. Planing to take one more health plan with 5 or 10 lakh SI.
5. Interested to take Personnel accident policy, Which is better one
Mine is admin job so obviuosly premium will be less. Kindly advise me weather taking for family is better or individual is better, For kid it will cover or not?
looking for the all following features in accidental care plan
• No requirement of medical tests and documentation
• Substantial cover for lower premium
• Worldwide coverage
• Can be bought by individual or by family
• Easy and certified claim process
• 24x7 support service
• Legal and Funeral expenses
• Child education benefit
• Double indemnity for death/ disability while traveling in public transport
• Accidental death
• Permanent total/ partial disability
• Accidental dismemberment
• Medical expenses/ hospitalization charges
• Child education support
• Life support benefit
• Burns, broken bones and Ambulance
• Daily allowance
In case of not able to attend duty due to accident/ Financial benefit
Out patient benefits.
I would like to request you to suggest me which is better to use during the hospital admission due to any accident not only road accident, weather health cashless card is better or Accidental policy better.
If i use health cashless card can i get all the above benefits from accidental plan including medical expenses,treatment charges...etc
how much accidental plan SI taking is better as per my portfolio. kindly suggest taking individual is better or family is better. What about the kid? how can i ensure his coverage?
Plss give me proper reply and advise me the best accidental plan.
Dear Rajesh,
Your few questions are answered in above post. However, the whole planning can't be done with mere your few lines of sharing.
Do you have any positive or negative opinion about Oriental or iffcko if I may ask
2) Will definately check with insurance company but wanted to know if you would suggest 25 lakh policy or something like a 15 lakh ?
Varun-Nothing negative. But hard to name a particular product.
Hello Basu,
Wonderful article on personal Accident . Need your expert suggestion on choosing the "right" personal accident policy
1) I have been suggested Oriental & Iffcko Tokio Personal Accident Insurance. In the above blogpost ( 2014) there is no mention of these two companies . Right now would be recommend these options or not ?
2) My father is 61 years and currently having an annual salary of around 8 lakhs . Should he buy a policy of 25 lakhs or lesser ( considering his income will be reducing further in the coming years - semi retirement )
Varun-1) If the products available and suitable to your budget and feature, then why not go with them NOW also?
2) Yes, but hard to say which company offers. You have to check the respective insurance company and buy it.
Hello Basavraj,
I just bought 5 lakhs sum assured health insurance which i plan to stay invested in for near future by paying regular premium. i also have 1.3 crore Term insurance (from 2 separate insurers)
My question is if i buy a personal accident plan ,does it make sense to have add on of:
a) Accidental Hospitalization Expenses Cover
b) Accidental Hospital Daily Allowance
if it is already covered in health insurance ?
Regards,
Rohan
Rohan-The accidental insurance features are not covered usually in health insurance plans. Hence, you must buy this separately.
hi Basavraj,
Thanks for the reply ! what exactly is meant by accidental insurance features not covered by health insurance plans ?
my health insurance states the below:
The Policy covers Reasonable and Customary Charges
incurred towards medical treatment taken during the Policy
Period for an Illness, Accident or condition described below
if this is contracted or sustained by an Insured Person during
the Policy Period and subject always to the Sum Insured, any
subsidiary limit specified in the Product Benefits Table,e
medical treatment.
i was just talking about if health insurance states it covers expense of accident, why should we buy "Accidental hospitalization expense cover" ? is it not the same ?
Thanks Again !
Rohan
Rohan-They are clearly stating that they cover HOSPITALISATION expenses due to the accident, but what if you bedridden due to the accident and not hospitalized?? There comes the accidental insurance which may be you based on the disability %.
thanks a lot Basavraj !
Considering my total 1.3 crores Life cover and 5 lakhs (private) + 4 lakh (company) healthcare.. what should be my ideal accident cover ?
i was thinking of 25 lakhs (also have Pradhan mantri accident insurance of 2 lakhs) ,is it optimal or shall i increase to 50 lakh. also i liked Star health accident care among all the others after exhaustive comparison.
Let me know your thoughts about the same !
Regards,
Rohan
Rohan-There is no standard rule. But you may go for around Rs.25 lakh to Rs.50 lakh.
just to add on top. i am buying PA cover and not neglecting it, it's just the add on part i am confused about add on part of hospitalization cover in PA, which i think i am already getting in my health insurance. hope i made myself clear :)
Dear sir,
1. In column of Bharti Axa you have mentioned cumulative bonus as 5% per claim free year. what is the meaning of that?
Also children education bonus 10,000 means??? Please explain
2. If possible, please tell claim settlement ratio of Bharti Axa & Max Bupa
3. Recently i have purchased term insurance plan iProtect smart & I want to buy accidental insurance with total & permanent disability.
u have not mentioned appollo munich in the list. Why??
Please reply
Regards,
Sachin
Sachin-1) Let us assume there are no claims in particular year, then 5% of sum insured will be added to next year sum assured.
2) You may check IRDA Annual Report.
3) There is no specific reason. It was the old post. May be missed it updating later.
This information is based on 2014 ?
Do we have any updates for 2016 ?
May be some companies would have improved the overall benefits to compete with others?
Kindly advise
Sachin-Soon I will write the same. Please wait.
What is the Best accidental insurance plan if you were to invest among those available in market
I already have term insurnace cover from ICICI and Medical insurance through National Health
I want to go for an standalone accidental isnurance and hence require your judgement to shortlist the best accidental insurance as per your experience or feedback at present 2016 Nov
Sachin-Refer above post.