Personal Accident Cover

Personal Accident (PA) cover is a general-insurance product that pays a defined benefit on accidental death, permanent total disability, permanent partial disability, and — on some variants — temporary total disability due to an accident. It does not cover illness or natural-cause death; the trigger is an accident, meaning a sudden, unforeseen, involuntary event caused by external, violent, and visible means. PA policies are sold as standalone plans, as riders to life insurance, and as bundled covers with credit cards and bank accounts.

A typical standalone PA policy has four coverage heads. First, accidental death benefit (AD) — 100% of the sum insured paid on death due to accident. Second, permanent total disability (PTD) — 100% or 125% of the sum insured for total, irrecoverable loss of earning capacity (loss of both eyes, both limbs, or similar).

Third, permanent partial disability (PPD) — a percentage of the sum insured based on a schedule (say, 50% for loss of one hand, 30% for loss of one thumb). Fourth, temporary total disability (TTD) — a weekly benefit (typically 1% of the sum insured per week, capped at 100 weeks) for the period the insured is unable to work. Worked example: a 35-year-old salaried professional buys a ₹1 crore PA cover with all four heads for an annual premium of around ₹2,500 to ₹4,000 (PA premiums are remarkably low because the probability of an accident-triggered event is much smaller than the probability of death from all causes combined).

If the insured suffers a vehicle accident resulting in the loss of one leg below the knee, the PPD schedule might pay 50% of sum insured = ₹50 lakh, plus weekly TTD of ₹1 lakh per week for the recovery period up to 100 weeks. A common misconception is that PA cover is redundant for someone who already has a term plan. Term insurance covers death from any cause but pays nothing on disability — and disability is the scenario that often drives the larger lifetime financial impact, because earning capacity is lost while living expenses continue.

PA's permanent-disability benefit specifically addresses this gap. Another common misconception is that the PA cover bundled with a credit card or bank account is sufficient. Typical bundled PA sums insured are ₹5 lakh to ₹25 lakh and are conditional (the card must have been used in the preceding 90 days, or the employer must have notified the bank).

A dedicated standalone PA policy with a meaningful sum insured matched to annual income is usually a more robust design. Related: term insurance, critical illness cover, rider.