• Personal accident insurance is one of the popular classes of accident insurance and as a supplement to life insurance; it provides an ideal protection against death or disability• Due to rapid industrialization, and more and more use of complex machinery, industrial accidents are more frequent. To cater to the varying and increasing needs, different forms of cover are available. Individuals are granted this cover under an individual personal accident insurance policy. For a group of individuals, the insurance companies have devised group personal accident insurance policies.
Definition• This is a contractual agreement between an insurance provider and policy holder. The insurance provider agrees to pay the policy holder a monthly income should they be unable to continue working due to an accident. In return for this, the policy holder will pay the insurance provider a monthly premium
Feature of personal accident insurance:• The maximum liability of the insurer is the capital sum insured The amount of claim is payable to the insured person or his illegal representative in case of death. Appointment of nominee is desirable.• No weekly compensation shall become payable until total amount shall have been ascertained and agreed.• Personal accident insurance with another insurer must be within the knowledge and written permission of the insurer or else policy becomes void
• Age limits between 16 and 25 years. The upper age limit may be relaxed in certain cases on merit.• Payment of the insurance benefits is made within 30 days of receiving the necessary documents.• Insurance policy also implicates money compensation to the insureds heir in case of death.• The value of insurance - annual insurance premium is determined according to insureds age, gender and profession
•• The terms, conditions and exceptions that appear in the Policy or in any endorsement are part of the contract and must be complied with. Failure to comply may result in the claim being denied.
Coverage• Personal accident policy provides for specific benefit of insured person suffering injury, resulting in death or disablement arising solely and directing from an accident caused by violent external and visible means.
• The types of coverage normally provided under a personal accident policy include : 1. Accidental Death 2. Permanent Disablement: -- Both hands or feet or one hand and one foot (known as loss of limbs) – Complete and irrecoverable loss of sight in both eyes.
• Loss of one limb and complete and recoverable loss of sight of one eyes- in this regard 50% of capital sum insured.• 3. Temporary total disablement- in this respect 33% of capital sum insured, maximum taka 5000 per week.
Types of personal accident insurance• Business travel accident insurance: This type of insurance covers employees during business travel.• Household members’ personal accident insurance: This type of insurance covers all members of households; spouses, children & other members of household.• Personal accident insurance for members of hunting and fishing organization: This insurance may include: insurance for members of sports organizations, professional sports competitors & participants in sports races and competition.
• Personal accident insurance for pilots, cabin crew members & passengers: Insurance is available for; professionals & sport pilots, military pilots, passengers.• Personal accident insurance for members of cultural associations: Insurance is available for; professional members of cultural associations.• Personal accident insurance for children, pupils & students: This insurance is available for; children, pupils and students.• Personal accident insurance for students staying abroad: This insurance is available for individuals and groups who travel abroad for work experience through authorized legal entities.
Types of policy• There are different types of personal accident insurance policy on the basis of payment of claim, coverage, premium rate. There are as follows Simple personal accident policies only pay a cash sum following an accident where you are injured Simple income protection policies pay when you are off work following an accident Where they merge is when an income protection policy also includes illness, and a personal accident policy includes sickness and/ or pays monthly benefits rather than a cash sum.
We regard policies which cover an accident and sickness/ illness by paying a cash sum as Personal Accident We regard policies which cover accident and illness by paying a monthly benefit as Income Protection. Insurers themselves often confuse you by using vague product names like “Protection " which can include income protection, critical illness, life, personal accident and other products. - or a flashy name which gives no indication of what it covers.
• There are three main ways to partially or wholly protect you against the costs of long term care.• On some products, you only get money if you qualify as needing care.• On some products, you get money anyway, but there is some help in arranging care if needed.• On investment and Equity Release products, you choose whether or not to use the proceeds on care.
Condition of policy• This policy and the Schedules shall be read together to express a specific meaning of the policy.• In the event of any accident or disablement by diseases an insured person notice of it within fourteen days of the occurance of the accident.• The insured or his legal representatives demand written report from a medical attendant.• The doctor must be qualified and registered and approved by the company.• In case of the loss of sight more than fourteen days, notice must be given.
• All sum payable within one calendar month that must approved by the company.• No sum payable unless claimed within one offer it has become due.• If req. by the company, medical or other agent shall examine the accident with reasonable time.• If an insured person shall change his occupation, he must give immediate notice and if that job is more hazardous, he may pay extra premium.• The company shall not be bound to notice relating policy.
Exceptions We already know that an insured person gets benefit from the insurer due to death or disablement arising solely and directly from an accident by violent external and visible means. But in the following cases an injured person will not be entitled to get benefit from the insurer if accident death or disablement arising from the following reasons though he is injured. • War & kindred risk, riot, strike and civil commotion or international self-injury whether criminal or not.
• Injury sustained whilst the insured person is under influence of intoxicants or is suffering from insanity. • Injury occasioned by or contributed to by venereal disease or pregnancy.• Flying for the purpose of any trade or technical operation or as member of an aircrew or any other aerial activities.• Hunting, stable-chasing, racing of any kind (other than one foot), rugby, football, polo, motorcycling, or winter sports, underwater pastime or pot-holding except in so far as the company has by endorsement agreed to extend all insurance.
• Intentional or self-inflicted injury• Suicide or attempted suicide, while sane or insane• Committing or attempting to commit a crime or assault, or while engaged in a criminal enterprise• Engaging in any speed or performance contest, whether legal or illegal• Use of a vehicle while under the influence of drugs or alcohol• Traveling in, boarding, or alighting from, any portion of a vehicle not designed and manufactured specifically for the transportation of persons.• Use of the vehicle in violation of the terms of the rental contract
Classification of Occupation• Profession or occupation is an important factor to guide the underwriter as regards assessment of risk in each case and consequently it stands to serve as the basis of rating. A representative classification is given as under: Class I. Accountants, Bankers, member of Legal & Medical Profession, teachers, consulting engineers, mercantile assistants and those engaged in executive, administrative, etc duties. Class II. Architects, engineers, (Superintendents) only, Planters, Salesmen and master tradesmen who supervise but do not do manual work.
Class III. Engineer (superintending and working) engineering contractors engaged in manual work not involving unusual hazards. Class IV. Any occupation involving unusual hazards. It is not possible to give exhaustive list and the classification given above is only indicative of the considerations involved.
Rate of claim Description percentage1.Permament total loss of sight of both 100%eyes2.Total or permanent total loss of use of 100%two limbs3.Total or permanent total loss of use of 75%right arm4.Total or permanent total loss of use of 60%left arm5.Total or permanent total loss of use of 65%right fore arm6. Total or permanent total loss of use of 55%left fore arm.7. Total or permanent total loss of use of 60%right hand
8.Total or permanent total loss of use 50% of left hand 9. total or permanent total loss of use of 6% things10. total or permanent total loss of leg at 50%or below the knee11.total or permanent total loss of use of 40%foot12.permament total loss of sight of one 50%eye13.Permament total deafness in one ear 15%14. total or permanent total loss of use of 25%thumbs on right hand15.Permament total deafness in twp ear 50%16.total or permanent total loss of use of 20%thumbs on left hand
17.total or permanent total loss of 20%use of index finger on the righthand18. total or permanent total loss of use 15%of index finger on the left hand19. total or permanent total loss of use 12%of middle finger on right hand20. total or permanent total loss of use 10%of middle finger on left hand21. total or permanent total loss of use 10%of third (ring)finger on right hand22. total or permanent total loss of use 8%of third (ring)finger on left hand23. total or permanent loss of use of 8%little finger on right hand24. total or permanent total loss of use 6%of little finger on left hand
25.total or permanent total loss of 5%use of big toe26. total or permanent total loss of 3%use of big toe27.Permsanent total disablement 55% annuallyother than the above • Source: Karnaphuli Insurance Company Limited
Limitations of Personal Accident:• Life insurance covers the risk of death; health insurance covers the risk of sickness ; where as personal accident insurance covers the risk associated with accidents. If the life assured is seriously injured in an accident and disabled either temporarily or permanently, he/she will not able to work and earn. To minimize the financial hardship of the life assured and his/her family members, the personal accident insurance provides the financial support. So personal accident insurance is very essential and Life insurance cover without personal accident cover is inadequate from risk management point of view.• The personal accident policy provides compensation in event of insured sustaining injuries solely and directly from an accident cause by violence, visible and external means, resulting in to death or disablement be it temporary or permanent.
• These exclusions and limitation depend on insurance company and some common things are:• This insurance policy will pay the compensation, if you have any physical injury due to accident.• This policy does not pay for car, property, and animals which are damaged or lost in accident. You are not paid for inconvenience, lost work, injured pride or etc.• Other common exclusions: Disability because of the AIDS/HIV, war, normal pregnancy and childbirth, injury due to suicide attempt, self injury, criminal acts, failing medical advice, having a part in any dangerous or hazardous work, activity, sport or hobby, having military duty, driving by having more alcohol are not allowed by law.• These are some common exclusion and limitations, this information may help you to take the decision in choosing the insurance policy.
What benefits should I expect?• A simple personal accident policy pays a set cash sum on death.• On other benefits, there may be a cash sum, a monthly income or a mixture of the two. Monthly income is limited to a set number of months.• Most also include a cash sum for Total Permanent Disablement. This is where you are not going to get better.• Then there are frequently specific items where you get payment for injuries which result in• Total loss of speech, hearing or sight• Total loss of or use of a hand or foot• Less frequent are specific higher benefits for catastrophes which result in quadriplegia or paraplegia.•
• Some policies go into great detail about the different benefits for each type of accident such as fracture or dislocation.• Also common is Temporary Total Disablement. This is where you are seriously hurt but will get better.• Other benefits may include Hospital Cash for every night you are in hospital.• It is quite common for benefits to be double, treble or quadrupled for serious problems such as travel accident, accidental death, disappearance or exposure.• Other product features available include• 24/7 helpline• Counseling• Rehabilitation• Damage to clothing and personal property• Kidnap and hijack• Cost of specialist transport to get you to hospital
• You can be protected from accidental expenditure by this personal accident insurance and it will pay some lump sum amount for injury or death because of accident. Benefits depends on insurance company, there are some general benefits such as:• A set of cash sum on death is paid by a simple personal accident policy.• It may be cash sum, a monthly income or they may pay a mixture of two.• There are some specific payments for specific injuries like total loss of speech, hearing or sight and total loss of or use of hand or foot.• Hospital cash can be paid for every day if you are in hospital.• Other features are like 24/7 help line, counseling, rehabilitation.
CONCLUSION:• Personal accident policy premiums are much lower in comparison to the term life insurance or health insurance premiums. Further in view of the misery and financial hardship of the surviving insured after the accident, taking a personal accident cover is a necessity and should take precedence over life and health insurance cover.