From April 1 next year, there will not be much confusion in choosing a better plan for accidental cover. The biggest reason for this is that the Insurance Regulatory and Development Authority of India (IRDAI) has directed that all general and health insurance companies will now offer a standard personal accident insurance product. This order will come into effect from 1 April 2021. A minimum coverage will inevitably be available with this standard product. The insured will be able to extend it with additional cover. However premium insurance companies will determine the same. Up to 1 crore coverage will be available under this product.
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There are problems with many policies at this time
There are many types of accident insurance products currently available in the insurance market. All products have their own special features. Because of this, people taking insurance cover face many problems in choosing the best plan. Now this decision of IRDAI will make it easier for people to choose personal accident insurance product. It will be mandatory to offer such products compulsorily to all general and health insurance companies.
This will benefit you
In this type of standard policy, death, permanent total disability and permanent partial disability will be offered as basic cover. Under the permanent permanent disability, during the policy period, if the insured suffers a permanent total disability due to an accident, then the entire sum will be paid.
If the hospital expenses for temporary complete disability conditions during an accident, the insurance company may make a provision in the product for some optimal covers such as education grants. Standard product base cover and optimum cover like Temporary Total Disability Benefit and Education Grant will be offered on a profit basis. On the other hand, due to accident, optimum cover like hospital expenses will be offered on the basis of compensation.
2.5 lakh to 1 crore cover
Under Standard Personal Accident Insurance, there will be a minimum insurance of up to 2.5 lakhs and maximum of 1 crore. Apart from this range, the insurance company can also offer other products with the same name with the same term and conditions on its behalf. The minimum entry age for this product will be 18 years and the maximum entry age will be 70 years.
Provision of commutative bonus also
In this new standard product, there will also be a provision for commutative bonus. You will be able to increase the sum insured by 5% after every claim free policy year without commutative bonus. This means that if you have not made a claim in any policy year, you will be able to increase it to a maximum of 50 percent of the sum insured. However, if a claim is made in an year, then the cumulative bonus can be reduced at the same rate.
Source: www.financialexpress.com