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Personal accident insurance policies can be a good tool to manage the risk associated with accidents. Non-life insurance companies offer these products for both individuals and groups. If you are a person exposed to the risk of an accident, you should ideally buy one. For ex-ample, a cab driver, who spends most of his time driving a cab on the road where most of the accidents take place should have a personal accident cover.

Personal accident insurance policies not only insure an individual in case of a death due to accident, but they also assure monetary payouts in case of disability — both temporary and permanent nature. The buyers should run through the schedule of benefits where the insurer enlists the 'condition insured' and the 'amount payable' before he signs above the dotted line. For example, if an insured individual loses sight in one eye, he is entitled for 50% of the sum assured. The schedule comprises a host of such conditions to the extent of 'loss of toe'.

The policy also pays for medical expenses arising out of accident subject to sub limits. An insured individual is also entitled for hospital confinement allowance if he is hospitalised due to an accident. The insurance companies have also realised the need of 'family assistance'. In case of the unfortunate death of the insured in an accident, the children are also entitled for 'education assistance payouts' if the buyer has bought this optional benefit at the time of purchase of the policy. If you are willing to pay a bit more, the insurers also offer you additional benefits such as 'house modification allowance' and 'loss of employment allowance' for the assured who have met with an accident.

There is no need to go for a medical test to buy personal accident insurance policies and generally the tenure of the policies is one year. Of course, there are options available where one can pay for longer tenures and enjoy a discount on the premium payable. The cover can be extended to your family if you are willing to pay a bit more to include them. The sum assured may vary from 1 lakh to 1 crore. The insurance company offers a no-claim bonus of 5% for each claim-free year.