We all know that life is full of uncertainties. To cover our financial responsibilities we take life insurance and that too after proper calculation and a for good sum assured. To ensure that our savings don’t get depleted due to medical expenditure, we take health insurance. But there is one more type which is most ignored which is Accident and Disability insurance. This is the cheapest insurance policy but it gets ignored just because it does not carry any tax benefit – the reason for which most of the insurance policies get purchased. Where we calculate Human Life value to check how much family will need after the insured’s demise to cover the financial responsibilities and obligations, then do you think that responsibilities will reduce if a person doesn’t die, but gets disabled. This could be the event when a person becomes dependent, on his own dependents. Please understand – where medical problems can increase your expenditure, disability has dual effect as it will reduce your income too. To cover all the uncertainties relating to accident, accident insurance plays a major role.
What is an accident?
In insurance terminology, accident is defined as a sudden, unforeseen and unexpected event caused by external, violent and visible means (but does not include illness or disease) which results in physical body injury (but does not include mental, nervous or emotional disorders, depression or anxiety).
When we use the term accident it does not always mean an accident on the road with some vehicle but accidents can happen anywhere – if you fell off your chair and injured your back bone or you slipped in the bathroom and had a fracture, etc.
Why accident insurance?
Accident does not always cause death but sometimes it leads to disability which could be temporary or permanent. The disability leads to reduction in your earning capacity. Sometimes the disability is so severe that you might have to leave your job or even be on leave for some months. This may put you in a financial crunch; there could be a huge financial burden on your family. So to cover up all this you need accident insurance.
What accident policy covers?
It generally covers four aspects:
Accident insurance vs. accident rider in life insurance
Accident rider in a life insurance policy is generally linked to the coverage you have opted for in life insurance so you might not be able to do justice with accident coverage. Moreover at the time of claim if you take claim once from the life insurance company then the rider in the policy will be treated as matured which means in future you cannot take benefit of the same. So, it is always better to take separate personal accident policy and before purchasing do the calculations as you do while purchasing life insurance as this is the coverage which will support you also in case of any uncertain event.
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