Irdai to bring in standard personal accident cover, max sum assured Rs 1 cr

All general and standalone health insurers will have to offer it from April 1, 2021; hospitalisation costs up to 10% of base sum insured covered

After bringing in a standard health cover, covid cover, term cover, and a standard vector borne disease health policy, now the insurance regulator has released an exposure draft for a standard personal accident insurance cover. The product will have a maximum sum assured of Rs 1 crore and a minimum of Rs 2.5 lakh. All general and standalone  health insurers will have to offer it April 1, 2021 onwards.

“Beyond the range specified, insurers can offer on their own and can use the same name for the product if all terms and conditions remain the same,” Irdai said in its exposure draft.

The standard personal accident product will have a basic cover that all insurance companies have to offer. Under the base cover, 100 per cent sum assured shall be payable by the insurance company on the death of the insured person due to an injury sustained in an accident during the policy period, provided that the death occurs within 12 months from the date of the accident.

Furthermore, in case of permanent total disablement due to an accident, a benefit equal to entire sum assured shall be payable to the insured person. In case of partial disablement, depending on the severity, a benefit equal to the sum assured of 1-50 per cent will be paid to the insured person.

There will also be an optional cover, under which, if the insured person sustains an injury in an accident that renders him/her incapable from engaging in any employment or occupation which the insured person was capable of performing at the time of the accident, then he/she shall be eligible for a compensation at the rate of 1 per cent of the base sum insured per week, till the time they are able to return to work.

Moreover, hospitalisaiton expenses arising due to an accident shall be indemnified up to the limit of 10 per cent of base sum insured. Also, a one-time educational grant of 10 per cent of the base sum insured shall be payable for a maximum of two dependent children of the insured following an admissible claim made of the insured person towards death or total permanent disability.

The regulator has said the sum insured under the policy shall increase by 5 per cent each year for each claim free policy year, provided the policy is renewed without a break. This increase in coverage has been capped at 50 per cent of the basic sum insured. The policy tenure of the standard product will be one year and its pricing will depend on the insurer’s portfolio and claim experience in that portfolio. 

Highlights:

Irdai to bring in a standard personal accident cover

Max sum assured to be Rs 1 crore and minimum of Rs 2.5 lakh

It has a base cover that will give death and disability benefit

The optional cover will provide for loss of pay because of temporary disablement

And, it will cover hospitalization expense as well as give an education grant

Insurers have to offer the product from April 1, 2021

Policy period shall be one year, minimum entry age at 18 with maximum at 70