Personal Accident Insurance

Full form: PA Insurance

Insurance

Personal Accident (PA) insurance covers financial consequences of accidents: accidental death, permanent total disability, permanent partial disability, and temporary total disability. Separate from health insurance, which covers illness and hospitalisation.

In detail

PA insurance covers:nAccidental death: full sum insured to nomineenPermanent Total Disability (PTD): 100% sum insured (e.g., loss of both legs)nPermanent Partial Disability (PPD): proportionate % (loss of one eye = 50%)nTemporary Total Disability: weekly income for up to 52 weeks (e.g., fracture preventing work)nnPremium: very cheap -- Rs 1,000-3,000/year for Rs 25-50L cover. Available standalone or as group policy.nNote: does not cover illness-related death. Must be accidental.

Real-life example

🇮🇳 India example

Construction supervisor Rajan buys Rs 25L PA policy (Rs 1,800/year). He falls from scaffolding, loses use of one leg (PPD - 50% benefit). Receives Rs 12.5L. Uses to pay off home loan balance of Rs 8L and build accessible modifications to home. Rs 4.5L as emergency fund. His health insurance covers surgery bills.

Frequently asked questions

Does term insurance replace personal accident insurance? ▼

Not fully. Term insurance covers accidental death (same as PA accidental death benefit). But term insurance does not pay for disability (temporary or permanent) if you survive. PA insurance covers disability income loss -- term insurance does not. Both are needed.