PERSONAL ACCIDENT INSURANCE

Dr.S.A.SENTHIL KUMAR Reader in Management Studies Pondicherry University, Karaikal Campus 609 605.

Introduction
A policy that will pay out an income or a lump sum in the event of disability, dismemberment or death, caused by an accident. Personal Accident Insurance is not Life Assurance. The purpose of PA insurance is to pay fixed compensation for death or disablement resulting from accidental bodily injury.

Basic Principles
Utmost Good faith Indemnity Contribution Subrogation

Insurable Interest

Coverage
The insured shall sustain any bodily injury resulting solely and directly from accident caused by external violent and visible means.

Analysis of Terms
Bodily injury: This term excludes disease from natural causes, but disease proximately caused by accident. Solely and directly: The bodily injury shall have been caused solely and directly by an accident. Eg. An accident may set up a disease and result in death, but death may direct result of the accident, Where there is no break in the chain of causation. Accident: An accident is an event which is wholly unexpected, not intended or designed.

 External, Violent and visible means: The cause of accident i.e., the means, must be within the definition as a whole, but the result may not be external. Eg. Injury may be internal(Inside the body) Disablement: When a person is prevented by an accidental bodily injury from engaging in any occupation or business, and his Inability to attend to any occupation or business

Types of Disablement
1. Permanent total Disablement 2. Permanent partial Disablement, and 3. Temporary total Disablement

Permanent Total Disablement

The disablement is permanent and irrevocable nature and is absolutely total. The insured person is prevented from engaging in gainful employment of any kind, Example: Paralysis, loss of sight of both eyes, loss of two entire hands or two entire feet. Equivalent to PTD: one entire hand and one entire foot, one eye and loss of one entire hand / foot.

Permanent Partial Disablement

This is similar to permanent the disablement is not total but is only partial. Example: loss of toe or a finger.

Temporary Total Disablement

The disablement which is total but for a temporary period only. This temporary period may be days, weeks, months or years. Example:

Benefits
The benefits (a),b),(c),(d) and (e) are referred to as capital benefits, and benefit (f)as weekly benefit. It is assumed that the capital sum insured by the policy is Rupees 1,00,000. \

Contingency

Amount of Compensation Payable

a) Death
b) Loss of two limbs or both eyes or one limb and one eye c) Loss of one limb or one eye

1,00,000 (i.e., 100% of Capital sum insured)

1,00,000 (i.e., 100% of Capital sum insured) 50,000 (i.e., 50% of Capital sum insured)

d) Permanent total disablement 100% capital sum insured other than the above (e.g.) paralysis due to accident
e) Permanent partial disablement f) Temporary total disablement Percentage shown in the table in the policy. Weekly payment of 1000/- subject to a maximum of 100 weeks

Additional Benefits
Carriage of dead body 2% of Capital Sum Insured
or Rs. 25000 whichever is less.

Educational Fund Dependent child below 25 yrs.

One dependent : 10% of the Capital Sum Insured subject to maximum of Rs. 5000 More than One: 10% of the Capital Sum Insured subject to maximum of Rs.10,000

Cumulative Bonus Compensation payable shall be

increased by 5% thereof in respect of each completed year.

PROVISOS
Compensation payment can be only under one item for the same period of disablement. Once a claim is settled under one of the sub clauses, No further claim can be admitted under the policy Any payment in case of more than one claim The companies liability under the policy is limited to the amount of capital sum insured (+ cumulative bonus, if applicable) Payment of weekly compensation until the total amount shall have been ascertained and greed.

EXCLUSIONS
I. From intentional self-injury, suicide or attempted suicide

II.

Under the influence of intoxicating liquor or drugs

III. Engaging in Aviation or Ballooning, Mounting IV. Directly or indirectly caused by venereal diseases or insanity V. Committing any breach of law with criminal intent.

VI. From service in the armed forces

VII. Resulting directly or indirectly from child birth or pregnancy.

VIII. War and kindred peril and nuclear risks.

Rating
- Fixing the rates of Premium - Rates of Premium should be commensurate with the hazard involved. In PA Insurance , the main factor used for rating is the Occupation. Occupations/ risks are classified into Three Groups

Classification of risk
Risk Group I : Accountants, Doctors, Lawers, Teachers, Bankers. Risk Group II : Builders, Contractors and Engineers, All persons engaged in manual labour, sportsmen .. Risk Group III : Persons working in underground mines, explosives, jockeys, circus Personnel..

Extensions
Medical Expenses All P.A. policy can be extended by
endorsement, on payment of extra premium to cover medical expenses incurred by the insured in connection with the accidental bodily injury

War and allied risks

During Peace time 50% extra over the normal rate During abnormal/ apprehensive period 150% extra

Age Limit
Minimum Age limit 5 years Maximum 70 years

Renewal after 70 years upto 80 years, subject to a loading 5% of the renewal premium Fresh Proposal above 70 years and below 80 years cover at normal rate plus loading of 10%

Discounts
Term of the policy (years) Discount %
No. of Persons

1
2 3

Nil
5 10

250-1,000 1001-10,000 10,000 1Lac Above 1 Lac- 2.5 Lac

Above 2.5 Lacs- 5 Lacs Above 5Lacs- 10 Lacs Above 10 Lacs

% Age of Dos 5 10 15 30 35 40 45

4
5

15
20

Types of P.A. Policy

Janatha Personal Accident Insurance Gramin Personal Accident Insurance Students safety Insurance Group Personal Accident Policy Raj Rajeshwari Mahila Kalyan Yojana Bhagyashree Child welfare policy