Personal Accident Insurance is a Non-Life Insurance wherein it provides monetary compensation for the death or bodily injury arising from an accident. An accident is an unexpected, unforeseen, or unintentional event that occurs from a violent, external, visible means. A bodily injury is a loss or damage to the physical well-being of an individual caused by an external factor.
Personal Accident Insurance has a schedule of benefits such as:
Loss of Life. The loss of life must be accidental in origin and must occur within one hundred eighty (1800 days from the date of the accident. The benefit is the lump sum of the principal sum.
Disablement or Disability. Disablement or disability can either be an actual loss of use or actual severance and must occur within one hundred eighty days (180) from the date of the accident. The sum benefits depend on the losses and must not exceed the principal sum. For example, if the loss is the limbs, it is 100% benefit, but if the loss is one foot, the benefit is 40%.
Medical Reimbursement. The medical reimbursement covers the expenses of up to three (3) months related to the accident and is usually 10% of the principal sum.
Burial Expenses. The burial expenses may either be through reimbursement or a fixed cash benefit and are available only if the death is due to the accident.
Personal Accident Insurance also undergoes underwriting factors: age, annual income, health or medical status, claims history, and occupation. The assured must be 18 to 65 years old. The total sum insured is usually not more than ten times of annual income. Claims history is needed to eliminate the acceptance of bad risks and to know the applicant’s insurability. The occupation has classifications which are Class 1, Class 2, Class 3, and Class 4. However, there are prohibited risks such as professional athletes, entertainers, and musicians, sailors, secret service personnel, ship’s crew, steeplejacks, underground workers, window cleaners, woodworking machinists, metalworking machinists, loggers, and sawmill workers, persons with total blindness, total deafness, skull or spinal injuries, infirmities, and diseases of the brain, heart, liver, lungs, and chest is they are affected, chronic diseases, venereal diseases, and rheumatic fever, politicians and jockeys.
Class 1. This is a non-hazardous occupation, with staff involved in the management and office duties. Examples are accountants, bankers, chemists, clerks, advertising managers, architects, and auditors.
Class 2. These occupations are the staff and supervisory involved in light manual labor such as automobile dealer, land surveyor, press photographer, and the likes.
Class 3. These are workers engaged in heavy manual labor with no health or accidental hazards. This includes maintenance personnel, factory workers using light machinery.
Class 4. This occupation is manual labor, including heavy types of machinery such as baker, barber, engraver, gardener, and the likes.