Personal accident insurance is a contract entered into between the insurer and the insured where the insurer undertakes to pay a specified amount as per the contract if the insured is physically or partially injured due to an accident or illness. This is not an indemnity agreement. Because human physical or mental damage is never measurable in money, therefore it is not compensable.

Introduction

Human life is always uncertain. At any time we can get into an accident. Personal accident insurance is a contract entered into between the insurer and the insured where the insurer undertakes to pay a specified amount as per the contract if the insured is physically or partially injured due to an accident or illness. This is not an indemnity agreement. Because human physical or mental damage is never measurable in money, therefore it is not compensable. In this case the insurer helps the policyholder to protect against future distress by providing financial benefits only. So it's a lot like life insurance. Generally, officers, employees or workers engaged in hazardous activities have their own accident insurance either by themselves or by the employer. Again, this type of insurance can be accepted in case of being killed or injured by the assailant.

Classification of Personal Accident Insurance

The increasing popularity of personal accident insurance has led to the introduction of various types of personal accident insurance. These are discussed one by one below:

 

 1. Accidental death insurance: 

People can die due to an accident at any moment.  Accidental death insurance is a contract entered into between the insured and the insurer whereby the sum assured is paid to the insured's nominees or heirs if the insured is injured due to an external direct cause and dies within a specified period from the date of injury.  For example, in case of a serious accident while traveling in an airplane or a ship or in a theater or cinema hall and dies within a certain period of time, double the amount insured is paid under this type of insurance.  Usually only those engaged in risky activities take this type of insurance.

 

 2. Accidental death or disability insurance:

A person may die due to serious injuries in an accidental accident;  Again the insured may become permanently disabled or lose a limb and become useless forever.  In such cases, if accidental disability insurance is taken, the following benefits may be available from the insurer:

To the Assured : 

1. Total sum assured payable on death.

2. Total Sum Assured is payable in case of loss of two limbs or both eyes or one limb and one eye.

3. 10%-90% of the sum assured is payable in case of loss of any one part of the body or one eye

4. In case of permanent total disability of the insured, the sum assured is payable in cash or in fixed installments.

 

3.Specified Disease and Accident Insurance: 

An insurance contract that provides a weekly benefit in case of accidental death or disability due to a specified disease specified in the policy is called Specified Disease or Accidental Disability Insurance. Different companies list different disease names. Generally, insurance companies guarantee this type of allowance from 52 weeks to 120 weeks.

 

4. Any sickness and Accident insurance:

People may lose performance temporarily due to any type of disease. Such insurance is provided against temporary disability due to such illness. However, it is not common in this country.  However, in Europe and America, this type of insurance is very popular and covers 70/80 types of diseases.

 

 5.Hospital and medical expenses insurance:

As the treatment of people suffering from sudden accidents or suffering from various diseases is currently expensive, due to financial difficulties, it is not possible for many to get proper treatment. If desired, the policyholder can arrange medical or hospital expenses insurance with the above type of insurance by paying the prescribed additional premium.

 

 6.  Benefit of Waiver of Premium Insurance:

If a policyholder or policyholder becomes disabled due to an accident or disease and is no longer able to pay the premium or it is not possible to collect the premium from him. As a result, the policy was canceled. In this case, the insurers introduce the premium waiver system to benefit the policyholders.

How to Claims Personal Accident Insurance

 

Accident insurances, like other insurances, have certain procedures for claiming compensation.  Personal accident insurance, like life insurance, is not indemnity insurance, although other accident insurances are all indemnity insurance. For that reason, personal accident insurance is called an insurance method rather than a compensation claim method. Following is the sequence of making a claim in case of personal accident insurance:

 

The insured may purchase such insurance for himself or for anyone in whom he has an insurable interest. In case of an accident occurring during the insured period the insured himself or in case of death of the accident insured his nominee or dependents shall first notify the insurer of such accident by written notice. Basically it is through receipt of such notification that the insurer comes to know about the accident and the process of raising the insurance claim begins. However, the insurer after receiving the said written notice sends a specific demand letter to the insured or the nominated person as the case may be for raising the insurance claim. This claim form should be properly filled by the insured himself or his nominee in case of death of the insured person and a registered doctor's certificate about the accident and in case of death of the insured person in the accident, the death certificate should be attached and submitted to the insurer within the stipulated time. After receiving the filled claim form, the insurer checks the authenticity of the accident and the validity of the claim. If necessary, the insurance company can send its own experts or doctors to verify the cause of the accident and extent of damage. But generally, if the damage is minor, the compensation is paid as per the claim form and the insured's doctor's certificate. And if the policyholder is physically and mentally seriously damaged, after the treatment of the policyholder, the extent of the damage is checked and the insurance claim is paid. Sometimes a certain amount of daily medical allowance is paid during the period of treatment as per the contract. 

 

Finally, the above rules are usually used to raise personal accident insurance claims. But in this case it must be remembered that the time of raising the insurance claim should not exceed the insured period under any circumstances.

 

How to Fix Premium in Personal Accident Insurance

 

In life insurance, as the age of the person increases, so does the level of risk. But that relationship is not as significant in personal accident insurance. Although increasing age increases the likelihood of greater risk due to energy depletion, age-related factors and experience are also considered to be helpful in preventing accidents. Therefore, the premium or salary is not determined in this case considering the increase in the age of the insured. In this case the risk depends on the expected benefits and occupation and is about the same for all age groups and occupations. So in personal accident insurance, the insurance premium depends on the variation of facilities and the occupation of the insured person. Therefore, on the basis of occupation, the risk is divided into the following three categories:

 

First class: General risk: In the first class, the insured persons are - legal traders, general traders, bankers, representatives, clerks, government officials-employees, teachers-teachers etc. They bear common risks. Their risk score is in the ideal range of 0-75.

 

Second Class : Additional Risk : Second class insured persons are - shopkeepers, persons engaged in hazardous work, traders, commercial travelers, producers of some business who sometimes also do observation work etc. They carry additional risks. Their risk level is between 75-125  they belong to the ideal risk stage.

 

Third Class: Hazardous Risks: Third class insured persons are auctioneers, house builders, weavers, engineers, laborers, veterinary surgeons, persons engaged in extra hazardous trades such as butchers, wood dealers, horse grooms, forest officers, contractors, individuals etc. They are the most dangerous occupations. Their risk level is between 125-500 they belong to the sub-ideal risk stage.

 

 

 

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