Page 310 - DMGT303_BANKING_AND_INSURANCE

Unit 14: Marine and Motor Insurance

In India, two major insurance options to cover the risk from accidents are available: Notes
1. Stand-alone (separate) personal accident insurance policies sold by general insurance
companies

2. Accident rider along with a life cover.
Disability

Accidents may result into disability and disability further results in loss of income and earning
power, involving additional expenses and extra needs. Disability may be of two kinds:

Partial Disability

If a person becomes partially disabled to perform his tasks, it is called partial disability.
Disability income policies provide for the payment of reduced monthly income if insured can't
work full time and/or is prevented from performing one or more important daily duties
pertaining to his occupation.

Permanent Disability Benefit

Generally the policy defines the disability in physical terms viz. loss of sight of both the eyes,
amputations of both the hands at or above the wrist, or amputation of both the legs at or above
ankles etc.

The disability must be total and permanent and the life assured then or in future, would not be
able to do any work, occupation or profession to earn or obtain any wages, compensation or
profit.
The following benefits are provided for the insurance policy in case permanent disability arises
out of an accident:

1. An additional sum equal to the sum assured will be paid in monthly instalments spread
over 10 years.
2. The future premiums are waived off (are not payable).

3. In case of claim (Death or maturity) before 10 years the disability benefit instalments,
which have not fallen due, will be paid along with the claim. The maximum limit is Rs 5.00
lakhs or Rs 10.00 lakhs depending upon the insurer and exclusion clauses are similar to
accident benefit.
The basic pre conditions for granting the benefits are:

1. The disability should be solely and directly the result of accidental injury.
2. The disability must be total and permanent.
3. The accidental injury and the resultant permanent disability should take place before the
assured attains the age of 65 years.
Immediately after the disability, the life assured must intimate the insurance company giving
the full details within a specified time period.

Coverage

The policies cover a number of eventualities, including plane crashes, train accidents, murder,
hit-and-run and even death due to snakebite.

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