Personal Accident Insurance

Accidents can strain your emotional and physical well-being and financial health. Personal accidental insurance is one way to protect yourself and your family from the financial stress during this time. 

With affordable premiums, this is the right way to secure your family’s financial future. Knowing its benefits and differences from other insurance options allows you to choose wisely.

In the first half of 2025 alone, 26,770 people lost their lives on National Highways. Between 2019 and 2023, India recorded an estimated 800,000 road accident deaths, with pedestrians accounting for nearly 150,000 of them.

Two-wheeler riders remain the most vulnerable group, with 69,240 fatalities reported in 2021 alone, making them the highest among all vehicle categories. 

According to the National Sample Survey, accident-related hospitalisation lasts 8–10 days on average and can cost families over 10% of their annual income in out-of-pocket medical expenses.

Personal accident policy is broadly divided into two categories:

Individual Accident Insurance

This type of insurance covers accidental demise, loss of limb or sight, and other disabilities of an individual.

Group Accident Insurance

In most cases, employers get this insurance to protect their employees against any accidents.

Here are the different types of coverage you can get with personal accidental insurance:

Accidental Death Cover

In case of untimely demise, the insurer will pay the sum insured or the amount mentioned in the policy to the nominee or family member.

Permanent/Total Disability Cover

If the accident results in permanent or total disability, the insurer will pay out a part of the sum insured, as agreed upon.

Permanent Partial Disability Cover

If you suffer partial permanent disabilities that affect skills and productivity, you get a percentage of the insured sum, which can be up to 100%. 

Temporary Total Disability

If the accident results in complete disability for a temporary period, you can get a weekly allowance. This can help you cover the loss of income and manage your expenses, such as medical bills and EMI.

Understanding the policy terms will help you avoid paying out-of-pocket, which can lead to financial stress. For this, you need to know what the insurer will and will not cover. This can vary depending on the policy and insurance provider.

Here are all the incidents commonly covered under personal accidental insurance:

• Premature death
  

• Total/partial disability
  

• Temporary complete disability
  

• Charges for ambulance
  

• Life support
  

• Education cost of dependent children
  

• Hospital cash allowance
  

• Weekly reimbursement for loss of income
  

• Accidental dismemberment benefits 

Given below are some common expenses and incidents not covered under the plan: 

• Natural death
  

• Pregnancy or childbirth
  

• Injuries due to criminal activities
  

• War injuries
  

• Injuries sustained while intoxicated or under the influence of drugs
  

• Mental disorder
  

• Pre-existing mental conditions
  

• Non-allopathic treatments
  

• Suicide
  

• Pre-existing disability 

It also does not provide coverage to individuals who are participating in the following:

• Naval force
  

• Military
  

• Air force
  

• Adventure sports 

Getting an accident insurance protects you from an unexpected financial burden with comprehensive coverage. The dependent family members get the required financial aid in case of the untimely demise of the insured individual.  

If they face disability or life support, personal accidental insurance can cover its cost as well as compensation for the loss of income. This way, you and your family can avoid the additional financial stress during an emergency or unfortunate time.

Here are other benefits of getting accidental insurance for yourself or your employees:

• It covers most of the disabilities and injuries
  

• You can customise the insurance plan with an add-on to meet all your financial requirements
  

• It also covers the cost of dependent children's education
  

• They have affordable premiums that you can easily fit into your budget
  

• You can enjoy worldwide coverage for better security
  

• There is no waiting period
  

• You do not have to go through a medical test to make a claim
  

• You can also receive monthly or weekly allowance for a specified period
  

• You do not have to worry about loans and EMIs while being injured
  

• It also covers the cost of transportation for the family members
  

While both provide death benefits to the insured's family, they have different criteria. Life insurance policy covers all types of natural deaths. Personal accidental insurance policy covers untimely demise due to accident, disability and injury. 

Here is a detailed overview of the difference between these two policies.

These two policies cover different aspects of health and financial concerns. Accidental insurance does not cover any pre-existing conditions, but only incidental injury. Critical illness covers insured individuals' financial requirements after the diagnosis of critical illness.

Term insurance covers all natural deaths, but accidental insurance only covers deaths due to an accident. Another difference is that term policies are not liable to cover medical expenses.

The premium for your insurance is subject to many factors:

• If you have a high insured amount, your premium will also be high
  

• Elderly people have a higher premium as they are at higher risk of accidents
  

• If you are employed at a high-risk job, then your premium will be higher
  

• Your health condition and medical history also play a critical role in deciding your insurance premium
  

• If you opt for add ones to enhance the coverage, your insurance premium will also increase

Your personal accidental insurance plan should be at least 10 times your annual income or 100 times your monthly income. Say you earn ₹1 Lakh per month or have an annual income of ₹12 Lakhs. 

In such a case, your insurance premium should be between ₹1.20 Crores and ₹1 Crore. 

Other factors that you should consider when choosing the payout amount are:

• Debts and loans
  

• Age
  

• Number of dependents
  

• Inflation
  

• Premium amount and affordability
  

• Future financial goals
  

Here are the steps you can follow to file an accident claim:

1. Inform the insurance company of the incident within the stipulated period
   

2. Get the claim form and fill it with accurate details
   

3. Submit the form with the required documents
   

4. Provide other documents relevant to the claim
   

5. Wait for the approval 

If approved, the amount will get transferred into your account promptly. In case of a query, a representative will reach out and clear any concerns.

Here is the list of documents required for an accidental death or impairment claim: 

• Duly filled claim form
  

• Death certificate
  

• Medical bills and investigation report
  

• Medical certificate
  

• FIR copy
  

• Doctors report
  

• Discharge proof
  

• Postmortem report

Apart from the advantages mentioned above, here are some other benefits you can enjoy:

Road Ambulance Charges

The cost of transportation from the site of the accident to the hospital is covered by the insurer

Easier claim process

Making a claim is very easy as there is no waiting period for or a medical test required

Daily Allowance

Most insurance plans cover the everyday expenses of the family member and the insured person

No Claim Benefits

You get benefits every year when you do not file a claim, resulting in a higher sum insured on a low premium amount

Residential and Vehicle Modification

It also provides financial assistance for renovation in case you suffer a permanent disability

The Income Tax Act, 1961 remains the governing law as of 2025. Under this Act, premiums paid toward standalone personal accident insurance policies generally do not qualify for tax deductions under Section 80D. 

Section 80D primarily provides deductions on premiums paid for health insurance policies and health riders. If personal accident cover is part of a health insurance plan or attached as a rider, the premium paid toward that cover may be eligible for deductions within the prescribed limits. 

For health insurance policies, taxpayers can claim deductions:

• Of up to ₹25,000 per year for self, spouse, and dependent children
  

• Of up to ₹25,000 (₹50,000 for senior citizens) for parents
  

• With a combined deduction limit reaching ₹1,00,000 where senior citizens are involved

These deductions apply only to premiums paid through non-cash modes. Standalone personal accident policies do not typically qualify for deductions under other sections such as 80C. 

Additionally, claim payouts from personal accident policies are generally exempt from tax under Section 10(10D). For precise applicability based on individual circumstances, it is advisable to consult official guidelines or a tax professional.