Personal Accident (PA) insurance is one of the most common insurance sold due to its relatively low premium. Unlike a life policy, personal accident insurance is an annual policy and subject to renewal every year.

Personal Accident insurance policy can be broadly categorized as follows:-
a) Individual Personal Accident policy taken on an individual.
b) Group Personal Accident policies taken by employers/organisation on the lives of their employees/members.
c) Travel PA policy taken whilst on travel.
d) Drivers & Passengers Personal Accident policies are taken up by car owners to cover the driver and passengers.

Personal Accident insurance basically covers an insured person against death or total & permanent disability caused solely by violent, accidental, external and visible means.

Other benefits may include partial permanent disablement, total temporary disablement, weekly compensation and medical benefits.

The cover is on 24 hours basis worldwide, covering accidents happening away from or at home, in the course of traveling to and from home to the place of work and during social or sports activities not specifically excluded by the policy.

Personal Accident insurance is not a contract of indemnity therefore any compensation which is payable under the policy shall be paid irrespective of the benefits recoverable by the insured person from any other policy except for medical expenses which is subject to contribution.

No compensation for death or permanent disablement shall be payable unless the death or permanent disablement occurs within twelve calendar months from the date of accident.

The maximum liability of the company shall not exceed 100% of the capital sum insured for the period of insurance. In the event of a total of 100% having been paid, all insurance under the policy shall immediately cease to be in force.

There is really no scientifically acceptable formula to calculate sum insured of an insured person. Personal Accident insurance is a form of protection against loss of future earnings and not a form of speculative investment. In other words, a Personal Accident insurance cover provide benefits what the Insured would have earned without the accident. As such what determines an adequate sum insured is really the extent of protection required, which can vary from person to person depending on each individual’s background, age, state of career development, earning power and the number of dependants.