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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

Client case: Mr. Sandeep Joshi, a 45-year-old consultant, has a personal accident policy and a health policy. He fractures his leg in a road accident, is hospitalised, and is unable to work for 8 weeks. Which statement is correct about how these products respond?

The health policy indemnifies actual hospitalisation expenses, whereas a personal accident policy with a temporary total disablement benefit pays a fixed weekly amount for lost income during recovery. Thus the two address different needs, and the PA benefit is not tied to the hospital bill.

  1. AThe health policy is an indemnity cover for hospital expenses, while a personal accident policy with temporary total disablement benefit can pay a fixed weekly income benefit regardless of the hospital billCorrect
  2. BBoth policies are indemnity covers and pay only actual medical bills, so loss of income can never be compensated
  3. CThe personal accident policy pays only on death and never for temporary disablement
  4. DThe health policy pays weekly income for lost earnings during the recovery period

Explanation

Health policies indemnify hospitalisation expenses. Personal accident policies are benefit policies and can include temporary total disablement as a weekly benefit, compensating lost income. The statement that PA pays only on death is wrong since PA covers permanent and temporary disablement too.

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