Standard Individual Accident Insurance Plan from April 1, 2021: do I need to subscribe? Features, benefits explained
There is currently a wide variety of personal accident insurance products on the market. Each product has unique characteristics, which makes it difficult for the insured to choose the right product. To overcome this challenge, a standard product with industry-wide coverage and policy terms is expected to be introduced in 2021.
IRDAI has decided to mandate all general and health insurers to offer a standard individual accident insurance product. It will be a standard personal accident product with industry-wide common coverage and policy terms, which every insurance customer should be aware of, Shriram Managing Director Neeraj Prakash told FE Online. General Insurance.
According to Prakash, every general and independent health insurer, which has received a certificate of registration to deal with health insurance and / or health insurance business, is required to offer this product. The standard product must include basic mandatory coverages providing protection against death, permanent disability or partial disability due to accidents.
Common features of the Standard Personal Accident insurance product
Standard coverage would provide protection against death, permanent disability or partial disability due to accidents. It would be offered with an insurance term of one year. The standard product would also cover hospital costs.
Personal accident coverage should include basic mandatory coverages, which should be uniform across the market. The standard product will need to be offered with a one-year insurance term and also cover hospital costs, Prakash said.
According to Shriram General Insurance MD, the insurer may determine the price taking into account the proposed coverages to be offered subject to compliance with the standards. The minimum sum insured will be Rs 2.5 lakh and a maximum sum insured will be Rs 1 crore. Beyond that, insurers can nominate themselves and can use the same name for the product if all terms and conditions remain the same.
Standard benefits of the personal accident insurance policy
A benefit equal to 100 per cent of the sum insured has also been offered in the event of “permanent total disability” subject to conditions.
As a result of an admissible claim by the insured person under the policy in the event of death or permanent total disability of the insured person, âa one-time scholarship of 10 percent of the basic sum insured, each, is payable, for a maximum of two dependent children of the insured âunder certain conditions.
Optional additional benefits
Temporary total disability is covered by its optional coverage, which is a supplement that you can buy after paying an additional premium. âUnder this coverage, you will be entitled to compensation at the rate of 1% of the sum insured per week until you return to work or up to 100 weeks, whichever occurs first. Likewise, hospital costs will also be covered to the extent of the actual expenses you incurred, if you purchase optional top-up coverage, âPrakash said. However, these will be capped at 10% of the sum insured, he added.
The third optional cover offered is the education grant.
In the event of the death or permanent disability of the policyholder, the insurer will pay a one-time scholarship of 10 per cent of the basic sum insured for a maximum of two dependent children, aged up to 25 years. This payment will only be made if the child is attending a course as a full-time student at an educational institution.
On the basic coverages, a benefit equal to 100 per cent of the sum insured is payable in the event of the death of the insured person, due to an injury suffered in an accident during the period of insurance, to provided that the death of the insured person occurs within 12 months from the date of the accident.
Increase in insured capital
The sum insured should be increased by five per cent for each year of insurance without loss, provided that the policy is renewed without interruption subject to a maximum of 50 per cent of the sum insured. If a claim is made in a given year, the cumulative bonus accumulated may be reduced to the same rate at which it was accumulated.
Why is Personal Accident coverage important?
âAn individual accident insurance policy is a staple in your wallet. Young people tend to postpone purchasing life and health insurance if they have no dependents or believe they are in perfect health, but the risk of accidents cannot be ruled out. While these limitations are also part of the standard coverage, the fact that it was designed by the regulator will provide comfort to policyholders, âPrakash said.
“The probability that policyholders feel aggrieved by the insurer would be lower because they would know that the clauses are uniform from one company to another,” he added.