What is accidental permanent total/partial disability insurance?

Accidents can happen to anyone at any time, and they often bring unexpected financial burdens. That’s where life insurance comes in.

Everyone is aware of what is life insurance, and people are familiar with traditional life insurance plans that provide financial security to loved ones in case of one’s untimely demise. 

However, there’s more to life insurance policy than just that. In this article, we’ll delve into the world of accidental permanent total/partial disability insurance and explore how it can safeguard your financial future.

Defining accidental permanent total/partial disability insurance

Imagine a scenario where you become disabled due to an accident and are unable to work for the rest of your life. This is where accidental permanent total/partial disability insurance (ATPD) Insurance comes into play. It provides you with an additional benefit if you suffer from total or partial disability caused by an accident. This benefit is equal to the sum assured under the rider.

To qualify for this benefit, the disability must be solely and directly caused by external, violent, unforeseeable, and visible means. It should occur independently of any other causes and be proven to the satisfaction of the insurer. The permanence of the disability is established six months following the date of the event causing it.

Accidental permanent total/partial disability can include the loss of both arms or both legs, one arm and one leg, or both eyes. Loss of arms or legs refers to dismemberment by amputation of the entire hand or foot, while loss of eyes means an entire and irrecoverable loss of sight.

Eligibility criteria and benefits

To be eligible for accidental permanent total/partial disability insurance, you must meet certain criteria:

  • Age at entry: Minimum 18 years; Maximum 75 years
  • Premium Frequency: Single, Yearly, Half-yearly, Quarterly, Monthly (through ECS only)
  • Policy Term: Minimum 5 years; Maximum 75 years less entry age
  • Premium Paying Term: Same as policy term (for Regular Premium), Once at inception (for Single Premium), Minimum 5 years (for Limited premium payment term)
  • Sum Assured Range: Minimum ₹25,000 or the minimum sum assured on the base product (whichever is lower); Maximum ₹50,00,000

The benefits of accidental permanent total/partial disability insurance

Now let’s take a look at the various benefits offered by accidental permanent total/partial disability insurance.

Accidental Permanent Total Disability Benefit

If you become permanently and disabled due to an accident before the end of the policy term, this benefit is payable. The size of this benefit is equal to the ATPD Rider Sum Assured.

Maturity Benefit

There is no maturity benefit or surrender benefit available for regular premium payment options. However, for single premium and limited premium payment options, surrender benefits are provided. The benefit payable on surrender depends on the type of premium payment:

Paid-Up Benefit

For single premium and regular premium payment options, this benefit does not apply. However, for limited premium payment term options, if at least the first two policy years’ premiums have been paid and any subsequent premiums are not paid, the policy continues as a paid-up policy with a paid-up sum assured payable on ATPD due to an accident.

The paid-up sum assured is calculated as “ATPD Rider Sum Assured (No. of premiums paid / Total no. of premiums payable).”

Understanding exclusions and other considerations

While accidental permanent total/partial disability insurance provides valuable coverage, it’s essential to be aware of its exclusions:

  • Infection: Death caused by any infection, except infections caused by externally visible wounds accidentally sustained.
  • Drug Abuse: Disability resulting from being under the influence of alcohol or drugs without the direction of a registered medical practitioner.
  • Self-inflicted Injury: Intentional self-inflicted injuries or injuries arising from attempted suicide.
  • Criminal Acts: Disabilities resulting from involvement in criminal or unlawful acts.
  • War and Civil Commotion: Disabilities resulting from war, invasion, hostilities, civil war, rebellion, revolution, or participation in a riot or civil commotion.
  • Nuclear Contamination: Disabilities resulting from the radioactive, explosive, or hazardous nature of nuclear fuel materials or property contaminated by nuclear fuel materials.
  • Aviation: Disabilities resulting from participating in flying activities other than as a passenger in a commercially licensed aircraft.
  • Hazardous Sports and Pastimes: Disabilities resulting from engaging in hazardous hobbies, pursuits, or races that were not previously declared and accepted by the insurance company.

It’s vital to thoroughly understand these exclusions and carefully read the policy documents for a comprehensive understanding of coverage. 

Understanding accidental permanent total/partial disability insurance 

Accidental permanent total/partial disability insurance offers an additional layer of financial protection that traditional life insurance policies may not cover. By understanding its benefits and eligibility criteria, you can make informed decisions to protect yourself and your loved ones against unforeseen accidents.

Remember to always consult with a financial advisor or insurance expert to ensure you choose the right policy for your needs. As you take steps towards securing your financial future, consider how Accidental Permanent Total/Partial Disability Insurance can provide you with peace of mind and ensure financial stability during challenging times.