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Personal Accident Insurance

We all in our day-to-day life are exposed to risk of accidents. It is a known factthat despite all possible precautions accidents do occur. Accident may occur whilewalking, driving or even in the house due to fall from stairs or in the bathroometc. This may result into disablement or loss of limbs or sometimes-even death.Knowing the fact one s endeavor that he/she or his/her dependents get adequate

compensation in the events of disablement or death.

To cater the need the general insurance industry has devised an insurance coverknown as the Personal Accident insurance. The policy covers the risks ofaccidental death and/or disablement and the cover is worldwide. The policyprovides compensation in the event of insured sustaining injuries, solely anddirectly from an accident caused by violence, visible and permanent totaldisablement, permanent partial disablement or temporary total disablement.

Risks under Personal Accident can be classified as under:

1. Normal RiskAccountants, Doctors, Lawyers, Architects, Consulting Engineers, Teachers,

Bankers, Persons engaged in Administrative, Secretarial and managerial functions,Shopkeepers, Shop Assistants not using machinery, Commercial travelers and personsengaged in occupations of similar hazards

2. Heavy RisksPersons working in underground mines, explosives, workers involved in electricalinstallation with high intensity power supply. Jockeys, Circus personnel, Personsengaged in activities like racing on wheels or horsebacks, mountaineering, wintersports, Skiing, ice hockey etc persons engaged in occupations of similar hazards.

Being insured against death is not sufficient: a disability caused by accidentssometimes doesn t allow you to work. Even if the disability is temporary, you still need a cover to meet financial obligation during hospitalization. It is here

that personal accident policies come in handy.

These accident policies provide cover for groups too. In case of group accidentalpolicies, the insurer gives marginal discounts on premiums.

Scope of the coverPermanent total disability: Defined as permanent loss of use of any two limbs, orpermanent and complete loss of sight in both eyes or injuries that render theinsured incapable of earning an income from the date of the accident onwards fromany work, occupation or profession (commensurate with his educationalqualifications, training and experience).

Permanent partial disability: Defined as permanent loss of any body part, one eye,

one limb or one finger or a toe or injuries that render the insured incapable ofearning an income. While the loss may be permanent, its effects on the insured andon his life are partial.

Temporary total disability: Defined as temporary loss in any form that may rendera person immobile or affect his earning capacity from the time of the accident. Inother words, a fracture in the arm or leg that keeps you from work qualifies: youmay be mobile but the injury may not support your ability to work.

Permanent Partial Disablement: The sight of one eye, or of the actual loss byphysical separation of one entire hand or of one entire foot, fifty percent (50%)

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of the Capital Sum Insured stated in the scheduleTotal and irrecoverable loss of use of a hand or a foot without physicalseparation, fifty percent (50%) of the Capital Sum Insured cited in the Schedule*** Physical Separation means amputation at or above the wrist and/that of the foot at or above the ankle respectively.

Permanent Total Disablement: At any time during the currency of the policy, the

insured sustains any bodily injury resulting solely and directly from accidentcaused by external violent and visible means.

1. If such injury, within 12 months of its occurrence, be the sole and directcause of the death of the insured, the capital sum insured as stated in theschedule.

2. If such injury within 12 months of its occurrence be the sole and directcause of the total and irrecoverable loss of:

* Sight in either eyes or actual loss by physical separation of both hands orfeet or one entire hand and one entire foot, loss of sight in one eye and loss ofone entire foot or one entire hand-the capital sum insured, stated in the scheduleof the policy.

* Loss of both hands or feet or one hand and one foot, or of loss of sight inone eye and loss of use of one hand or one foot, the capital sum insured stated inthe schedule of the policy.

3. If such injury within 12 months of its occurrence be the sole and directcause of the total and irrecoverable loss of:

* Sight in one eye or actual loss by physical separation of one entire hand orone entire foot- 50% of the capital sum insured stated in the schedule of thepolicy.

* Total and irrecoverable loss of use of a hand or a foot without physicalseparation - 50 per cent of the capital sum insured.

4. If such injury shall as a direct consequence permanently, totally andabsolutely disable the insured from engaging in any employment or occupation ofany description whatsoever- lumpsum equal to 100% of the capital sum insured.

5. If such injury shall within 12 months of its occurrence be the sole anddirect cause of the total and irrecoverable loss of use of or the actual loss byphysical separation of the following, then the percentage of the capital suminsured as indicated below, shall be payable. This benefit is called permanentpartial disablement benefit.

6 . If such injury shall be the sole and direct cause of temporary totaldisablement, then so long as the insured shall be totally disabled from engagingin any employment or occupation of any description whatsoever- a sum at the rate

of one per cent of capital sum insured per week but not exceeding Rs 3,000/- perweek. This benefit is known as temporary total disablement benefit.

Compensation payable under sub-clause (f) shall not be payable for more than 100weeks in respect to a person s injury calculated from the date of commencement of disablement and shall not exceed the capital sum insured.

Payment under this sub-clause (f) shall not be made until the total amount ofcompensation is ascertained and agreed upon.

Note: If any such injury as mentioned above shall result in the inability to

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remain gainfully employed, then the Capital Sum Insured payable will be 100%.

Terrorism and Acts of TerrorismIn case of the death of the insured arising out of terrorism or acts of terrorismwithin the policy period, the nominee (mentioned in the policy) is compensatedwith the sum Insured. The Company shall also pay compensation against permanentand total loss of limbs, sight etc. (of the insured) arising out of terrorism oracts of terrorism.

Exclusions:There is some exclusion in the Personal Accident Policy:

* Intentional self-injury, suicide or attempted suicide, general disease orinstantly.

* The Insured being under the influence of intoxicating liquor or drugs.* Death or disablement resulting from pregnancy or child birth (in case of

female insured)* The insured committing any breach of law with criminal intent.* Engaging in aviation activities other than traveling as bonafide passengers

(in a duly licensed standard type of aircraft) any where in the world.* War and Allied risks.

* Nuclear Perils.* Service on duty with any armed forces.

Pregnancy Exclusion ClauseInsurance under this policy shall not extend to cover death or disablementresulting directly or indirectly caused by, contributed to/or aggravated orprolonged by child birth or pregnancy or any consequence thereof. Insurers broadlyput disability into three categories.

Territorial LimitsThe cover provided under Personal Accident Policy is worldwide. However the claimsare payable only in Indian Rupees (If the policy is taken in India)

What should the Insured age be?Normally the cover is restricted to persons between the age of 5 to 70 years forboth male and female. Cover beyond these age limits can be had at higher rates ofpremium as under.

Renewal of the policy above 70years of age but up to 80years is subject to loadingof 5%on the premium. Fresh proposal above 70years but below 80years is subject toa loading of 10% on the premium. No medical examination is to be insisted for aand b.

Extensions of the policy:1. Medical Benefits ExtensionA policy can be extended on payment of extra premium to cover medical expenses

incurred by the insured in connection with injury, provided the claim for theinjury is admissible under the policy. The extension is available by loading thepremium either by 10% or by 25% and the benefit available is reimbursement ofMedical expenses

2. War and Allied RisksWar and allied risks are exceptions under the policy. But in respect of Indianpersonnel/Experts working in foreign countries on Civilian duties this exception may be deleted on payment of additional premium.

3. Special Additional Benefits

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Effective from April 10, 1989, a new clause called Children s Education Fund has been incorporated under the PA policy. Under this clause:

* If the insured person has one dependent child below the age of 23 years, anamount equal to 10% of the CSI subject to a maximum of Rs 5,000.

* If the insured person has more than one dependent child below the age of 23years, an amount equal to 10 per cent of the CSI subject to a maximum of Rsl0,000.