Personal Accident Insurance: Standalone Or Add-on Rider. Which Is Better?
In health insurance plans, on the other hand, personal accident cover is available as an optional add-on. The premiums are very low and the cover is optional.
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Accidental injuries and deaths are not uncommon in today’s age given the fast-paced life that we live. In a recent report published by the Government of India and WHO (World Health Organisation), road accidents caused the most number of deaths in individuals aged between five and 29 years. The number of accidental injuries and fatalities is so high in India that the Supreme Court has labelled road crashes as a ‘National Emergency’. In the last few years, the number of road rage cases was very high as recorded by the Ministry of Road Transport & Highways. Have a look
The trend continued in the year 2018 and though some years saw a slight decrease in the number of injury cases, the numbers are still a cause of worry.
Accidental injuries and death, whether incurred due to road accidents or any other causes, also results in financial loss. That is why having a financial back-up against accidental contingencies is a wise move. This is where a personal accident insurance comes into the picture.
What is personal accident insurance?
Personal accident insurance covers accidental deaths and disablements and pays a lump sum benefit in case the insured suffers from the covered contingencies.
How to buy personal accident insurance cover
Let’s understand how personal accident cover is offered in India -
Each option in details
- Standalone personal accident plans
Standalone plans are independent personal accident plans which can be bought by individuals for covering accidental death and disablement. These plans have a wide scope of coverage and cover the following –
- Accidental death
- Total permanent disablement
- Partial permanent disablement
- Total temporary disablement
- Other value-added coverage benefits like children’s education fund, ambulance costs, funeral expenses, etc.
- Riders/add-ons
Life and health insurance policies allow policyholders to choose coverage for personal accident by paying an additional premium for the same. In life insurance policies, personal accident cover is available under a rider called Accidental Death and Disability benefit rider. In health insurance plans, on the other hand, personal accident cover is available as an optional add-on. The premiums are very low and the cover is optional.
- Personal accident cover in motor insurance plans
Car and two wheeler insurance plans have a mandatory personal accident cover for the driver of the vehicle.
Which option to choose?
Since there are three ways of availing personal accident cover, you might be thinking which option would be the best. Coverage under all three options are different and therefore you should compare the coverage available and other aspects of the cover before making a choice. Let’s analyse –
Points of distinction | Standalone cover | Rider or add-on cover | Mandatory cover in motor insurance |
Who is covered | The person buying the plan is covered. Coverage can also be availed for family members by paying an additional premium | Life insurance riders provide coverage only for the insured. In health insurance plans, however, when the coverage is taken as an add-on, the family members can be covered if allowed by the plan | Only the driver/owner of the vehicle can avail the coverage |
What is covered | Accidental death, permanent total and partial disability, temporary total disability, children’s education fund and other benefits like ambulance expenses, funeral expenses, burns and fractures, loss of employment, etc. | Accidental death and permanent disablement resulting from an accident, whether total or partial in nature. | Accidental death and permanent partial as well as total disablement suffered as a result of an accident. |
Sum insured | Higher amounts of sum insured can be chosen. The sum insured is usually calculated on the basis of income of the policyholder | Sum insured is limited. It depends on the sum insured of the base policy or the sum insured promised by the add-on/rider | Limited sum insured is available depending on the level fixed by the IRDAI (Insurance Regulatory and Development Authority of India) |
Premium | Higher than the other options of riders/add-ons | Low. Premium varies across different insurers | Low. Premium is fixed by the IRADI and is same across all policies |
Which option is better?
A standalone personal accident plan is better than the other coverage options because –
- You get a wider scope of coverage
- The sum insured levels are high
- The plan is flexible and can be customized according to your coverage needs
Though the premiums are slightly higher, the exhaustive coverage benefits outweigh the premium. So, if you want to protect against the financial liability faced in case of accidental injuries, opt for a standalone personal accident plan and be financially secured against accidental contingencies.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
