Whenever you go in for a life insurance cover (except a moneyback policy) make it a point to avail of the personal accident cover as an add-on, which comes at Re 1 or, at the most, Rs 2 for every Rs 1,000 insured.
Rohit Mull, vice-president - marketing, Tata AIG Life Insurance Co, says a personal accident cover with a small additional premium covers an unfortunate death of the policyholder - say, due to an accident. Under the policy, the family of the policyholder will receive double the sum assured, in addition to waiver of the remaining premiums.
Ajit Kumar Mull, senior divisional manager, LIC south zone, says like many insurance policies the huge benefit available on taking a personal accident cover for a low premium is unknown to a large number of policyholders, and this will continue to be in the dark unless insurance agents start explaining or underlining the importance of it to the prospective policyholders.
Mull explains: personal accident cover includes two riders (additional cover) such as accidental death benefit, and accidental death and dismemberment benefit.
Accidental death benefit covers only the unfortunate death of a policyholder and the second rider covers only permanent disability. A customer can avail of both the riders to insure against both the uncertainties.
In case of permanent disability or death of a policyholder following an accident, his/her family members have to inform the life insurance company, in question, within 180 days of such an incident for payment of the sum assured.
In case of permanent disability, the severity of the disability is discounted before deciding on the payment of the sum assured.
In traditional ICICI policies, for example, the premium for an accidental death and disability is Rs 135 for every Rs 1,00,000 assured. Further, in the event of death or permanent disability, premiums to be paid towards the policy are waived.
In the case of ICICI ULPs (unit-linked plans), the additional premium for every Rs 1,00,000 of an accidental death and disability rider is Rs 100, while for accidental benefit rider is Rs 80.
If death occurs as a result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy.
If the death occurs while travelling in an authorised mass surface transport vehicle, the beneficiary will be entitled to twice the sum assured as an additional benefit.
In the eventuality of a physical disability, the life assured receives the rider sum assured in ten equal instalments over a period of 10 years or till maturity, whichever is earlier. This rider pays the sum assured under the rider that only covers death due to an accident. It does not offer a disability benefit.
Mull says the settlement of claims is easy for the personal accident cover vis-a-vis the cumbersome procedures involved in health insurance policies.
Here, the beneficiary has to just produce the hospital bills with a copy of the FIR (first information report) lodged and inform his/her insurance agent of the accident.
