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Insurance Against Accidental Death and Disability

  7/18/23 8:42 AM

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  7/18/23 8:42 AM   |

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Sahil walked into office late, looking pale and shaken. His colleague Meena gave him one look and she knew something was wrong. She followed him as he went to the water cooler and gulped down three glasses of water.

As he wet his face and turned around, he was surprised to see her standing there and looking at him quizzically.

Her gentle questioning caused him to relax and he managed a small smile too. “You wouldn’t believe it, you would almost not see me alive here today…,” and he went on to describe to her and to his other colleagues who gathered there how his motorbike just managed to escape from a huge tragedy. The auto rickshaw just seconds behind him got crushed under a cement dumper that somehow swerved and fell sideways. Only his sudden presence of mind as he anticipated the mishap made him suddenly speed up and escape literally by a hair’s breadth. He described how the auto driver had both his legs crushed to pulp, etc.

“Thank goodness I have life insurance,” he exclaimed. “And, what use is that in such a situation?”, said Meena.

You may have a large life insurance cover with a term plan to safeguard your family’s financial future. You may also have a comprehensive health insurance plan to pay your hospital bills. Your motorbike and car are insured against damage and theft. Even your house is covered against natural and man-made calamities and burglary.

“But do you see what you are missing here? Most probably, you don’t have personal accident insurance. I was just reading up on some facts because I recently got accident insurance for my husband and myself.”

Life is unpredictable as the numbers of accident are increasing every day. So the need for a personal accident policy is also increasing. It gives financial support to individual and his family, in case he meets with some major accident or mis-happening, which results in death or permanent disability or bodily injuries.

In 2013-14, less than 0.5% of the total population of the country, just about 55 lakh individuals, bought personal accident insurance. That’s only about 5% of the estimated insurable population.

There are two important reasons why a person should opt for accidental insurance.

First, India is the accident capital of the world, with a person dying every 90 seconds. The National Crime Records Bureau says 3.94 lakh Indians died in accidents in 2012 alone. While more than 35% of these deaths were due to road accidents, people also died due to train accidents (7.4%), drowning (7%), fire (5.9%), falls (3.1%) and electrocution (2.2%).

The number of people injured in road accidents is nearly four times higher than the number of deaths. In 2010, nearly 1.3 lakh people were killed in road accidents in India. However, over 5 lakh were either seriously injured or permanently disabled. Whether the disability is total or partial, temporary (3-4 months) or permanent, the personal accident policy will come in handy. If the policyholder has opted for the benefit, the plan will also pay the medical expenses incurred due to the accident.

Most accident victims are young. In 2012, nearly 60% of the accidental deaths involved people aged between 15 and 44 years. A young person is more likely to have an accident and injuries than die of an illness.

The second reason for opting for a total and permanent disability cover is that it will give a lump sum to the nominee if the policyholder meets with an accident that has caused permanent and total disability.

Sadly, the awareness of this need is very low. It is often missing in the portfolio of most insurance buyers. This is very odd, since the cover is not only useful but also very cheap. A cover of Rs. 10 lakh costs just about Rs. 500 a year. Yet, there are very few takers for this essential cover.

There is such low awareness about accidental total and permanent disability cover that people opting for various kinds of insurance normally do not even inquire about such a policy for themselves or their loved ones.

“Meena,” said a relieved but apprehensive Sahil, “Opting for a term plan with an accidental total and permanent disability cover is my first job on my Task Sheet!”


Neha Panchal - Financial Content Writer

Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.

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