As the name suggests, a personal accident policy pays out the sum assured only if it is due to an accident. Depending on the specific policy, the coverage could include death or total & permanent disability due to accident and dismemberment benefits due to accident.
Riders such as reimbursement of medical expenses and hospital cash or income replacement cash benefits may be added to the policy.
Even if you already have a life insurance policy, you may want to consider a personal accident cover for the following reasons:
1) Total sum assured: Personal accident is an affordable way to boost up total insurance sum assured. (Note that sum assured is paid out only if it is due to an accident.)
2) Dismemberment benefits: A life insurance plan generally pays out only for dismemberment of two limbs under total & permanent disability benefits. A personal accident policy with dismemberment benefit will payout for dismemberment depending on a schedule of severity.
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