Skip to main content

Accident Cover

You may have taken extra care with your insurance policy. But chances are that it may not meet the expenses resulting from an accident. So get wiser.

WHAT are the must-haves in your insurance kitty? A quick response probably could be a term cover and mediclaim. But have you thought about paying premium for a personal accident cover separately?

What is a personal accident cover? As the name suggests, it is a cover for an individual and his dependants from risks of accident. This includes the income loss resulting out of the treatment that follows. Take the example of Navin Sheth, a software professional, who drives to office everyday. Recently, he fractured his hand in an accident, which kept him out of action for a couple of months. The medical treatment cost him almost Rs 1 lakh. Thankfully, the personal accident policy came to his rescue, which compensated for the treatment as well as the loss of income.

Any accident drains out your finances as you have to meet your healthcare costs, plus there could be an income loss till your recuperate. You may have accumulated leave. But if the disability lasts for several months, then this cover could come in handy.

Mr Sheth has a term cover and also a mediclaim. But he still signed for an accident policy. The latter covers external and visible bodily injuries arising out of accidents. It basically covers contingencies such as accidental death, permanent total disability, permanent partial disability and temporary total disability.

Who needs it?

Experts say any individual who has to travel to work is prone to the risk of accident. While a term policy could cover the risk of dying, what is often neglected is the disability and consequential loss of income from an accident.

While for people practicing risky professions — circus ring master, miners, scuba divers or even a professional para glider — it is advisable to have this policy, it shouldn’t stop individuals like Navin who drive to office or are frequent travellers, the official adds.

Facts and figures

The premium (one time) for a personal accident insurance policy (PAIP) with Rs 3-lakh cover would work out to Rs 1,125 for a 3-year period, Rs 1,500 for a 4-year period and Rs 1,875 for a 5-year period. This would cover accidental death as well as permanent disability resulting from the accident. This is for people who fall in the age bracket of 5-70 years. The premiums are uniform across various age categories. However, most insurers give discounts (usually 10%) if you cover all the family members.

Usually, insurers charge a flat premium. But some state-owned insurers charge a fee according to risk profiles, which is pre-determined by the company itself. For example, desk job professionals such as teachers, accountants and lawyers are categorized as normal risk by the insurers. Field job professionals such as builders and contractors fall under medium risk category. During the policy tenure, if an individual develops a temporary disability emanating from an accident, the policy pays a fixed percentage of the sum insured as compensation. This percentage depends on the type of disablement. However, this is capped at a maximum of Rs 5,000 on a weekly basis.

Will a term cover suffice?

You have the option of signing up for a term cover and add personal accident cover as a rider. This will definitely work cheaper. Usually, if you pay an additional amount, say Rs 500, you can get an accidental death rider along with total disability. The usual limit for the rider is 10% of the sum assured for the whole life of the policy. Then, does it make sense taking an individual accident policy? The answer is that there are limitations as the extent of sum assured one could take. Second, once the claim is made, the rider ceases to exist. You cannot add that rider again to your policy. So, don’t overlook this cover. After all, it doesn’t really pinch your pocket.

Popular posts from this blog

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now