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Accidental Death Insurance: A Quick Overview

Accidental insurance is a type of insurance that provides financial protection in the event of an accidental injury or death. It helps you and your family cope with the financial burden of accidents that may result in disability, or death.

  • 2,410 Views | Updated on: Mar 22, 2024

Accidents do not come knocking at your doorstep. These unexpected events might occur at any time in your life, leading to minor or fatal damages. Hence, such circumstances result in significant financial obligations. Therefore, purchasing an accidental insurance policy is recommended to be better prepared.

India witnesses 422 deaths per day in road accidents. This suggests that buying an accidental insurance policy in India holds the utmost significance.

What is a Personal Accidental Insurance Plan?

An accidental insurance plan is a type of insurance coverage that provides a specified sum of money in the event of the policyholder’s death due to an accident. Unlike traditional life insurance policies, which generally cover natural causes of death or illnesses, accidental death insurance focuses solely on accidental fatalities. This means that if the insured person passes away as a direct result of an accident, the policy’s beneficiaries will receive a predetermined payout.

How Does Accident Insurance Work?

Accident insurance operates on a straightforward principle, if you suffer a covered accident and sustain injuries, you are eligible to receive a predetermined cash benefit. The amount of the benefit is outlined in your policy and varies based on the severity of the injury and the circumstances surrounding the accident. But how does it work?

Everything to know about Accidental Insurance Policy - Infographic

Choose a Policy

You select an accident insurance policy from an insurance provider based on your needs and budget. Policies can be tailored to offer different levels of coverage.

Accident Occurs

If you experience an accident covered by your policy, such as a fall, sports-related injury, or motor vehicle accident, you will need to seek medical attention and document your injuries.

File a Claim

To initiate the claims process, you will need to contact your insurance company. They will provide you with the necessary forms and guidance on submitting the required documentation, which typically includes medical records, accident reports, and other relevant information.

Claim Review

The insurance company reviews your claim and assesses whether the accident and resulting injuries meet the criteria outlined in your policy. If your claim is approved, the company will determine the amount of the cash benefit you are entitled to receive.

Cash Benefit

Once your claim is approved, the insurance company will disburse the cash benefit directly to you. This lump-sum payment can be used at your discretion to cover medical bills, rehabilitation expenses, transportation costs, and any other financial obligations you may have.

What Does Accident Insurance Cover?

Let us now understand the intricacies of accident insurance, exploring what it covers and why it is a crucial component of a comprehensive financial strategy. By understanding the scope of accident insurance, you can make informed decisions to safeguard your well-being and that of those around you.

Medical Expenses

One of the primary components of accident insurance is coverage for medical expenses incurred as a result of an accident. This can include hospital stays, surgeries, doctor visits, prescription medications, and medical treatments. Whether it’s a broken bone, a burn, or a head injury, accident insurance can help mitigate the out-of-pocket costs associated with receiving medical care.

Accidental Death and Dismemberment (AD&D)

Accidents can tragically lead to loss of life or permanent disabilities. Accidental Death and Dismemberment coverage provides a lump sum payment to beneficiaries in the event of the insured’s death due to an accident. Additionally, if the insured suffers the loss of a limb, eyesight, or hearing due to an accident, this coverage can also provide a benefit to help the individual adjust to the new circumstances.

Disability Benefits

Accident insurance often includes disability benefits that provide a portion of the insured’s income in the event they become temporarily or permanently disabled due to an accident. This can help the insured maintain their financial stability during the recovery period or even when faced with a lifelong disability.

Emergency Transportation and Ambulance Services

In some cases, accidents may require immediate transportation to a medical facility. Accident insurance may cover the costs associated with emergency transportation via ambulance, helicopter, or other means.

Accidental Dental Expenses

Accidents can cause dental injuries that require costly treatments. Accident insurance can help cover the expenses of dental procedures necessitated by accidents, such as chipped or knocked-out teeth.

What Does Personal Accident Insurance Not Cover?

While accidental insurance is a very crucial and important decision, the real question is, does it cover all accidents? The answer is no! It is time to know everything about the cases accidental insurance does not cover.

Pre-existing Conditions

Personal accident insurance typically excludes injuries or accidents related to pre-existing medical conditions. If the accident is caused or aggravated by a pre-existing health issue, the insurance claim may be denied.

Self-inflicted Injuries

Intentional self-inflicted injuries, suicide, and suicide attempts are generally not covered by personal accident insurance policies.

Acts of War and Terrorism

Injuries sustained during acts of war, civil unrest, terrorism, or riots may be excluded from coverage under personal accident insurance policies.

Dangerous Activities

Most personal accident insurance policies exclude injuries arising from participation in high-risk activities such as extreme sports, bungee jumping, skydiving, and professional sports.

Influence of Alcohol or Drugs

Accidents that occur while the policyholder is under the influence of alcohol or illegal drugs may be excluded from coverage.

Natural Causes

Personal accident insurance focuses on accidental events. Therefore, injuries or deaths resulting from natural causes such as illnesses, heart attacks, and strokes are generally not covered.

Who Should Get Accident Insurance?

Before you make the decision to opt for accident insurance, you must understand if you even need this insurance.

Breadwinners and Income Earners

If you are the primary breadwinner or a significant contributor to your family’s income, an accidental insurance plan can offer essential protection. In the unfortunate event of an accident that leaves you unable to work temporarily or permanently, the coverage can help replace lost income and ensure your family’s financial stability.

Individuals in High-Risk Professions

Certain professions, such as construction workers, miners, firefighters, and athletes, involve higher risks of accidents due to the nature of their work. If you are employed in such a field, an accidental insurance plan can provide an added layer of security, covering medical expenses and offering disability benefits if an accident occurs.

Frequent Travelers

If your lifestyle involves a significant amount of travel, whether for work or leisure, you may be exposed to higher risks, especially when it comes to accidents during commuting or while abroad. Accidental insurance can offer coverage for medical treatment and emergency evacuation, ensuring you are protected wherever you go.

Parents and Guardians

As a parent or guardian, your responsibilities extend to the well-being of your family members, particularly if you have dependents. Accidental insurance can provide financial support for medical expenses, rehabilitation, and education costs for your children in case of an accident that affects your ability to care for them.

The Need for an Accidental Insurance Policy

Contrary to popular perception, medical insurance does not cover all losses suffered as a consequence of an accident. Accident coverage is provided on certain healthcare insurances, although it is not as comprehensive as full accident coverage. Even if it is, it only covers health costs and not missed earnings. Accident insurance is designed to protect you against a range of unforeseen circumstances, be it death, disability, or/and bodily injuries.

Personal Accident Insurance: A Must

While nobody wants to fall prey to an accident, nobody can predict it either. It happens around us all the time, regardless of how careful people are. However, even though you can’t foresee when or where an accident will occur, you can prepare for the injury of the occurrence. Let’s take a look at how personal accident insurance can help us.

Accidental Life Insurance

Accidental life insurance provides a fundamental guarantee which ensures your family’s security by paying them benefits in case of your demise. However, do note that no accidental death benefit is paid if the demise is due to natural causes, such as cancer or heart disease. This policy contains a schedule that details the terms and percentages of the various benefits. For example, if you pass away from accidental injuries, the death must occur within a predefined period for benefits to be paid.

Accidental Health Insurance

This can be further segregated into two parts.

Total/Permanent Disability Cover

This insurance benefit compensates you for damages and permanent impairments that prevent you from working. This complete impairment might include the loss of both eyes or the loss of limbs.

Temporary/Partial Disability Cover

This insurance benefit compensates you or replaces your pay if you are unable to work for a particular time period due to non-work-related injuries, illnesses, or being bedridden.

Child Education Cover

As a consequence of the covered person’s accidental death or permanent complete disability, the education expenditure of dependent children is covered by the insurance policy.

Advantages of Investing in An Accidental Insurance Policy

Although the issue of post-accident planning can be emotionally and mentally draining, it is important and does have its benefits. Some of them are mentioned below.

  • Monthly Premium as Per Income & Location
  • Simple Claim Process
  • Medical Expense Compensation
  • Children Education Fund
  • Family Security & Welfare

Bottom Line

The idea of being safe rather than sorry is central to this discussion of buying accidental health insurance. This insurance not only ensures the well-being of the insured person’s family but also removes the weight off their shoulders.

Key takeaways

  • Accidental Death Insurance is a type of insurance coverage that provides a specified sum of money in the event of the policyholder’s death due to an accident.
  • If you suffer a covered accident and sustain injuries, you are eligible to receive a predetermined cash benefit.
  • One of the primary components of accident insurance is coverage for medical expenses incurred as a result of an accident.
  • Accident insurance can help cover the expenses of dental procedures necessitated by accidents, such as chipped or knocked-out teeth.
  • If you are the primary breadwinner or a significant contributor to your family’s income, an accidental insurance plan can offer essential protection.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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