Definition
Personal Accident Cover
Personal accident (PA) cover pays fixed benefits for death or disablement caused by an accident, on a benefit (non-indemnity) basis.
A PA policy typically pays the full sum insured for accidental death and for permanent total disability, and a percentage for permanent partial disability, plus weekly benefits for temporary total disability. Being benefit-based, it pays the agreed sum irrespective of actual expenses.
PA cover is inexpensive relative to the protection it offers and is valuable because accidents are a leading cause of death and disability among working-age Indians. Government schemes like PMSBY provide a basic version, while richer private PA policies offer higher sums and add-ons such as education benefits for children.
Related terms
- Critical Illness CoverCritical illness cover pays a lump sum on first diagnosis of a listed serious illness such as cancer, heart attack or stroke, regardless of treatment cost.
- Indemnity PrincipleThe principle of indemnity ensures an insured is restored to their pre-loss financial position but cannot profit from a claim, applying to general insurance.
- PMSBYPradhan Mantri Suraksha Bima Yojana is a government accident insurance scheme offering accidental death and disability cover for a nominal annual premium.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.