The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday issued draft guidelines on standard personal accident insurance policies and said all general and standalone health insurers will have to offer this product from April 1, 2021.
The product, which is proposed to be offered on an individual basis, will have a minimum sum insured of ₹2.5 lakh and a maximum of Rs 1 crore. The move is part of attempts by the insurance regulator to enforce a standard product with common coverage across the sector.
Irdai proposed a payout equal to 100% of the sum insured in case of death or permanent total disablement because of the accident.
For permanent partial disablement, the payout percentage will vary according to the type of disablement.
For example, in case of the loss of an entire foot or hand, the policy proposes a payout of 50% of the sum insured.
The cover for death and permanent total disablement will be mandatory, but insurers can offer optional covers along with the base plan, which will provide coverage for temporary total disablement and education grant for dependent children.
The optional cover will also pay out up to 10% of the base sum insured for hospitalization for a minimum of 24 hours as the result of an accident.
The minimum and maximum entry age has been kept at 18 years and 70 years, respectively. The policyholder can pay premiums yearly, half-yearly, quarterly, or monthly.
Insurance companies will have freedom on the pricing front.