Get complete information on Personal Accident Insurance
Personal accident insurance is one of the popular classes of accident insurance and as a supplement to life insurance; it provides an ideal protection against death or disability.
Though the majority of the policies still issued are to individuals, it has found favor with employers who offer personal accident insurance benefits as a part of the service benefits to their employees.
Due to rapid industrialisation, and more and more use of complex machinery, industrial accidents are more frequent. To cater to the varying and increasing needs, different forms of cover are available.
Individuals are granted this cover under an individual personal accident insurance’ policy. For a group of individuals, the insures have devised a group personal accident insurance policy.
Personal accident policy provides for specific benefits of insured person suffering injury, resulting in death or disablement arising solely and directly from an accident caused by violent external and visible means.
The bodily injury within twelve calendar months (period varies) from occurrence thereof shall solely and directly cause or result in-
2. Loss by Physical Separation at or above the wrist or ankle of:
(i) Both hands or feet or one hand and one foot (known as loss of limbs).
(ii) Complete and irrecoverable loss of sight in both eyes.
(iii) Loss of one limb and complete and irrecoverable loss of sight in one eye.
In these above cases capital sum insured is given.
(iv) Loss of one limb or complete and recoverable loss of sight of one eye-in this regard 50% of capital sum insured.
3. Temporary total disablement-in this respect 33% of capital sum insured, maximum Rs. 500 per week.
Features of the Policy :
1. The maximum liability of the insurer is the capital sum insured.
2. The amount of the claim is payable to the insured person or his legal representative in case of death. Appointment of nominee is desirable.
3. No weekly compensation shall become payable, until total amount shall have been ascertained and agreed.
4. Personal accidents cover (other than coupon insurance) with another insurer must be within the knowledge and written permission of the insurer or else policy becomes void.
5. Age limits between 16 and 25 years. The upper age limit may be relaxed in certain cases on merit.
The rate of premium to be charged depends mainly on the type of cover desired and the insured person’s occupation. This is a non-tariff business. The rates or premium charged by the various insurers for the same risk may, therefore, vary.
The proposal and the policy forms used by the various insurers also differ widely. The rates are usually charged per mile of the capital sum insured by the policy.
Extensions of Policy (Motor cycling):
In most parts of India, motor cycling and scooter riding have become so common that if accidents arising out using them are not covered, the policy is hardly of any practical significance.
Most of the insurers are, therefore, willing to grant cover against these risks with or without additional premium.
War and kindred risk, riot, strike and civil commotion or intentional self-injury whether criminal or not.
Injury sustained whilst the insured person is under influence of intoxicants or is suffering from insanity.
Injury occasioned by or contributed to by venereal disease or pregnancy.
Flying for the purpose of any trade of technical operation or as a member or an aircrew or any other aerial activities.
Hunting, stable-chasing, racing of any kind (other than one foot), rugby, football, polo, motor cycling or winter sports, underwater pastime or pot-holding except in so far as the companies have by endorsement agreed to extend the insurance.
Classification of Occupations:
Profession or occupation is an important factor to guide the underwriter as regards assessment of risk in each case and consequently it stands to serve as the basis of rating. A representative classification is given as under:
Class I-Accountants, Bankers, Member of Legal and Medical Profession, teachers, consulting engineers, mercantile assistants and those engaged in executive, administrative, etc., duties.
Class II -Architects, engineers (Superintendents! only, Planters, Salesmen and master tradesmen who supervise but do not do manual work.
Class III-Engineer (superintending and working), engineering contractors engaged in manual work not involving unusual hazards.
Class IV-Any occupation involving unusual hazards.
It is not possible to give an exhaustive list and the classification given above is only indicative of the considerations involved.
Personal Accident and Specified Diseases Insurance:
In addition to the death and disablement arising out of accidental bodily injury, insurance may also provide for benefits for disablement arising out of specified diseases. This is provided by issuing personal accident and specified diseases insurance policies. These policies contain the usual personal accident.
Certain diseases like malaria, influenza, etc., which are not included in the list of diseases specified in the policy, can be included within the scope of the cover afforded by the policy, on payment of additional premium. The additional premium is usually charged @ 0.1 % of the capitalism insured for each additional disease included.
Underwriting Consideration :
Underwriting involves the selection of risks for insurance. Based on the information collected, the underwriter has to decide to accept, particular risk and if he decides to accept, at what premium and on what terms. In fulfilling this task in respect of personal accident insurance the underwriter is guided broadly by the following considerations:
(i) Age of the insured person;
(ii) Health and physical build of the insured person;
(iii) Occupation of the insured person;
(iv) Other pursuits of the insured person; and
(v) Medical history and family history in case cover is extended to diseases. Medical Benefits and Hospitalisation Schemes
As part of their service benefits, many employers reimburse to their employees the expenses incurred by their employees for medical treatment. Insurers have, therefore, devised medical benefits and hospitalization schemes which they offer to the employers.
There is a tendency on the part of many employers to buy such insurance schemes rather than electing to reimburse the employees from their funds, because such scheme reduce the cost of providing medical facilities for the employees and cut out clerical work for them.