IRDAI issues guidelines for standard personal accident cover

The Insurance Regulatory and Development Authority of India (IRDAI) has come out with a standard personal accident cover on Thursday which will allow all general and health insurers to offer covers up to a sum assured of Rs 1 crore.

The standardized product set to go live from April 1 has been named “Saral Suraksha Bima.” The minimum sum assured has been set as Rs 2.5 lakh.

“Beyond the range specified, insurers can offer on their own and can use the same name for the product if all terms and conditions remain the same,” IRDAI said in its guidelines.

The personal accident insurance will have a basic cover under which the policyholder’s family can claim the entire sum assured on the death due to an injury sustained in an accident provided that the death occurs within 12 months from the date of the accident.

In case of permanent total disablement, a benefit will be paid by the insurer dependent on the severity of the injury.

Additionally, an optional cover will offer policyholder compensation for missing work on account of an injury. This will be 0.2 percent of the base sum insured per week, till the time the claimant is able to return to work.

“The insurance market is having a wide variety of personal accident insurance products. Each product has unique features and the insured public may find it a challenge to choose an appropriate product,” IRDAI said in the product guidelines.

“Therefore, with the objective of having a standard product with common coverage and policy wordings across the industry, the Authority has decided to mandate all general and health insurers to offer the standard personal accident insurance product,”

Hospitalization expenses due to the accident will also be subject to claim which shall be indemnified up to the limit of 10 percent of base sum insured. A one-time educational grant of 10 percent of the base sum insured shall be payable to all dependent children till the age of 25 of the insured following an admissible claim made of the insured person towards death or total permanent disability.

The regulator has said the sum insured under the policy shall increase by 5 per cent each year for each claim free policy year, pro