Mitigate prolonged hospitalisation with reasonably priced accident cover

Frequent travellers and those engaged in risky occupations must buy this inexpensive cover

The tragic crash on June 2 at Bahanaga Bazar station in Odisha resulted in at least 288 fatalities and over 1,000 injuries. Only a small percentage of passengers had availed of travel accident insurance while booking their tickets online through the Indian Railway Catering and Tourism Corporation (IRCTC) portal. 

Besides buying the insurance cover that comes along with the train ticket, it is arguably more astute to have one’s own independent accident insurance cover. One should also be aware of the other financial instruments that offer such coverage. A personal accident (PA) policy, which is a benefit policy, makes a payout in case of death or disability resulting from an accident.

What’s covered

The family receives a lump sum payment in the event of a policyholder’s accidental death or hospitalisation. Many policies even provide a cash allowance for a predetermined period.

Bhaskar Nerurkar, head of health administration team at Bajaj Allianz General Insurance, says, “PA coverage is available at affordable pricing. It provides financial protection to the insured and their family members in case of accidents resulting in bodily injuries, death, permanent total disability, temporary total disability, or permanent partial disabilities.”

Some policies offer additional benefits, such as assistance for children’s education, given the possible reduction in the individual’s earning capacity after an accident. Some also cover legal and funeral costs.

Nerurkar elaborates, “Today’s PA policies also include coverage for EMIs, fractures, and coma.”

Be aware of exclusions

Potential policy buyers need to understand the exclusions. “Exclusions in PA coverage include self-inflicted injuries, injuries sustained during wars or riots, natural death, pre-existing or congenital disabilities, and injuries linked to adventure sports activities,” says Nerurkar. (Some policies nowadays cover accidents that occur during adventure sports also.)

Several policies exclude those engaged in hazardous occupations. Study the policy terms as exclusions can vary from one policy to another.

Kapil Mehta, co-founder, SecureNow Insurance Brokers, says, “Accidents that occur in an intoxicated state are not covered. Likewise, you will not be compensated if there is a breach of law.”

PA coverage with other instruments

Motor insurance, certain critical illness covers, and some credit and debit cards also offer PA coverage.

Motor insurance mandatorily requires personal accident coverage for all vehicle owners or drivers, both in two-wheelers and four-wheelers.

Critical illness policies pay a lump sum for medical treatment, subject to the patient surviving for a certain period after diagnosis. Nitin Kumar, head of motor insurance, Policybazaar.com, says, “The accident cover that comes with this policy would cover partial or total disabilities or accidental death.”

Credit and debit cards issued by banks often come with complimentary PA coverage, which many customers are unaware of. The coverage amount could range between Rs 50,000 and Rs 10 lakh. The coverage for an air accident could be as high as Rs 1 crore.

Buy adequate sum insured

Those who travel widely must be especially careful when buying a PA policy. Kumar says, “Those who go abroad frequently must ensure that their PA policy offers global coverage.”

Individuals in high-risk occupations, such as builders, contractors, and engineers, must buy a PA policy. While deciding the sum insured, the number of dependants who rely on the breadwinner’s income must be taken into account. Nerurkar says, “The nature of the occupation should be considered. However, given the unpredictability of life, it’s preferable to opt for wide coverage to ensure your family’s financial stability during uncertain times.”

Naval Goel, founder and chief CEO, PolicyX, adds, “Your coverage amount should ideally be ten times your annual income or, at the very least, sufficient to cover costly hospitalisation fees.”

Accident covers are reasonably priced and offer a considerable amount of coverage. A PA policy for a 35-year-old with a sum insured of Rs 10 lakh would cost between Rs 500 and Rs 2,000 (depending on breadth of coverage). Goel says, “Purchasing a basic health policy and adding an accident rider can be expensive. Therefore, if you work in high-risk situations or travel frequently, investing in an accident policy is advisable.”

Lastly, read the fine print of the policy, and understand the inclusions and exclusions, to avoid unpleasant surprises later.

REMEMBER to tick insurance option on IRCTC portal

• The Optional Travel Insurance scheme for e-ticketing passengers of IRCTC has a minuscule premium of Rs 0.35 per person
• In the event of the passenger’s unfortunate demise in a train accident, the legal heir receives a fixed amount of Rs 10 lakh
• Separate amounts have been specified for cases involving permanent disability
• Fill in the nominee details accurately and share the insurance contract with your next of kin
• The insurer emails the insurance certificate or sends it via SMS  
• Make sure to tick the insurance box when purchasing tickets online