What is “Personal Accident Policy”? What is critical illness policy? How does personal accident and critical illness insurance help you?
If you ask anybody whether they have Insurance, most of the response will be ‘yes’, I have an LIC policy. But if you ask for the amount of Insurance, in most cases, it will be less than Rs. 2-3 Lakhs!
What is the purpose of taking an Insurance Policy? In case of unfortunate death of the policy holder, the family should get some amount, which should take care of their future financial requirements. But with this Rs. 2-3 Lakhs, what will be the fate of the nominee?
In most cases, the health insurance cover is also on the same level. In case of any costly procedures like Heart Surgery, majority of the people are using money from the savings and not from health insurance. This will impact their financial life!
With a rise in lifestyle diseases and increasing healthcare cost, the lack of adequate health cover can severely affect your financial goals. You should add additional covers to your existing cover. What are the additional insurance covers which are necessary now?
Personal Accident Policy
In Personal Accident Policy policy, benefits are payable in case of Accidental Death or Permanent Total Disablement (PTD) due to an accident. The nominee will receive the full Sum Insured in case of death due to accident. Personal accident policy will also pay the full Sum Insured in case of Permanent Total Disablement (PTD) due to accident. This is much useful when the policy holder is disabled and is unable to carry out his normal work.
In case of Permanent Total Disability, 100% sum insured is given to the insured person. The conditions under which this payout is made are:
- Loss of both hands or both feet or one hand and one foot
- Loss of a limb (hand/foot) and an eye
- Complete and irrecoverable loss of sight of both eyes
- Complete and irrecoverable loss of speech & hearing of both ears
In case of Permanent Partial Disability and Temporary Total Disability, the policy will pay certain percentage of the sum assured.
Some policies reimburse the hospital expenses due to accident and also pay a daily allowance for the days spent in the hospital. This policy covers accidents like road, rail natural calamities and arising out of terrorism/terrorist attack (???) etc. There is no medical examination to take this policy and the policy cover is global. Please read the policy conditions before taking the policy to see the scope of cover.
The premium for this basic policy per lakh will be in the range of Rs. 150-200. Advanced version of such policies with added features are available at a higher premium.
Critical Illness Policy
Critical Illness Policy offers cover against some listed critical diseases. The insurance company pays a lump sum amount when the specified disease is diagnosed irrespective of the amount spent on the illness. This policy should be taken in addition to the reimbursement type Mediclaim Policy. Mediclaim cuts down ones hospitalisation cost whereas Critical Illness Policy helps in compensating ones financial loss during a serious illness.
The list of diseases covered varies from company to company and one needs to check the exact details before buying the policy. Most common diseases covered are – Cancer, Major Organ Transplant, Heart Valve Replacement, Total Blindness, End Stage Renal Disease, Kidney Failure etc.
Exclusions – Personal Accident Policy and Critical Illness Policy
There are exclusions which vary from company to company. It is important to know the exclusions and the scope of the policy, before purchasing the policy to avoid any confusion later.
How you benefit in Personal Accident Policy and Critical Illness Policy?
The health insurance policy will act as the mother policy and will reimburse the actual hospital expenses. Critical Illness Policy will come to the rescue in case of any major diseases, which will make us unfit for sometime from the routine work. Personal Accident Policy will help in case of an accidental death or disability. The 3 policies complement each other and a combination will act as a comprehensive health cover.