Vehicle insurance is mandatory in India. It is a necessary expense. But the expense is worth your time and money. The law is that your insurance must cover at least the expenses of the person or vehicle that your car might cause damage to. This is what we call as third-party insurance.
Did you know India has the highest number of road accidents globally? A person dies in an accident every four minutes in India. Shocking, isn’t it?
This makes it even more important to keep yourself financially secure. It was recently that I learnt about personal accident cover through a dear college friend Sheetal, a disabled professional. It was an eye-opening lesson for me. This is what I learnt about accident insurance.
##Personal Accident Cover
Sheetal, a bright software engineer by profession, met with a deadly accident on a crowded Mumbai street. Her speeding four-wheeler collided head-on with a lorry while taking a U-turn. Her car was badly mangled and she was rushed to a nearby hospital. Because of the accident, her right hand became non-functional and the index finger on her left hand was severed.
This was a big blow to her. Being a software engineer, she feared that her professional future was doomed. Who would take care of the financial loss and the increased expenses? Her worst nightmare had come true. Thankfully, Sheetal had purchased a personal accident cover six months earlier. This covered permanent disability. The required premium was Rs 2,000.
Personal accident insurance helps insure against the risks arising out of an accident or injury, such as disability or death. So, the insurance company provided a sum of money (sum assured) to Sheetal after the accident.
Need for Health Insurance
Sheetal was admitted to a hospital for immediate treatment. She also had to undergo multiple life-changing surgeries. The personal accident cover would compensate for her disability. But what about the medical expenses she would incur at the hospital? With medical costs rising at an alarming rate in India, she was sure to foot a hefty hospital bill. Fortunately, she had also purchased a health plan that offered cashless hospitalisation service. In a cashless plan, the insurance company directly settles the medical expenses with the network hospital.
While her accident insurance covered medical expenses due to hospitalisation, the amount was low. It was a small component of the entire risk cover. Sheetal did not rely on the personal accident cover alone. A health insurance plan with a personal accident policy ensured complete protection.
Since she had cashless health insurance, Sheetal did not have to pay the medical expenses. Moreover, considering the gravity of the situation, her personal accident claim was settled within 10 days of receipt of the documents. She had to submit basic documents like the discharge report, disability certificate, and claim form.
An accident can be a life-changing event. But the right insurance covers can secure your future. As a part of the additional benefits, her accident cover also provided an education grant for her son, to compensate for the loss of income.
Remember, your personal accident cover may not provide for all your medical expenses. Read the terms and conditions of risk coverage in the insurance document carefully. Certain personal accident insurance covers do provide an allowance for hospitalisation under some conditions. But, as seen in Sheetal's case, having health insurance along with a personal accident policy gave her complete protection.
It is always wise to make sure you get a personal accident cover in your comprehensive car insurance plan. Paying a slightly higher premium and getting an add-on such as passenger cover would also be recommended if you travel with your family.
Ultimately, it is always good to be financially well-armed to face unexpected contingencies.