Term insurance has become a buzzword because of the safety net it provides to loved ones in case of a policyholder’s death within the tenure. While nobody takes away the importance of having term insurance and finding the sum assured using a term insurance calculator, many people ignore another important part of protection: personal accident insurance.
A term insurance policy assures financial security for the family in the event of death, whereas accident insurance provides crucial financial support in the event of an accident that causes disability or injury to the insured. If you’re wondering if personal accident coverage is mandatory, it absolutely isn’t. However, expert insurance agents often advise consumers to include a combination of both in their policy coverage. Are you wondering why? The following article will clarify this and if it is worth applying for.
Personal Accident Insurance: An Introductory Guide
Personal accident insurance is a form of insurance coverage that protects the insured financially in the event of an accident that causes them to become injured, disabled, or die. This insurance policy provides a range of benefits such as:
- Medical expenses
- Income replacement in the event of disability.
- Lump-sum payments for accidental death or prolonged disability ● Reimbursement for rehabilitation expenses.
Why should you get personal accident insurance in India?
Aside from the benefits, the increasing number of accidents in India highlights the need for personal accident insurance. Road accidents alone are responsible for a significant number of deaths, which is why you should obtain personal accident insurance. along with term insurance. According to research, more than 1,68,000 people died in road accidents in India in 2022. Furthermore, these are the recorded deaths, so the total may have been higher. In other words, no one wants to die, but even a partial loss in an accident can cause financial stress for the family. Personal accident insurance coverage can protect the family from financial difficulty.
Advantages of Purchasing Personal Accident Insurance Coverage along with your existing Term Insurance
Purchasing accident insurance alongside term insurance provides several advantages that improve financial protection and provide peace of mind to the insured.
Comprehensive Protection: Purchasing accident and term insurance together provides complete protection. While the right term insurance plan is important when you calculate the sum assured using a term insurance calculator for ensuring financial
stability for dependents in the case of the policyholder’s death, accidents that result in disabilities or injuries can also have serious financial implications. In such cases, accident insurance steps in to fill the gap by providing financial assistance.
Medical expenses and rehabilitation: Accidents can result in a significant increase in medical expenses, including hospitalization, surgery, and rehabilitation. These expenses may quickly wipe out your savings and strain your finances. Personal accident insurance may help with relieving this financial strain by covering medical bills related to accidents. It also provides financial help for rehabilitation services such as physical therapy and specialized therapies, allowing the policyholder to recuperate without worrying about the associated expenditures.
Income Replacement In the Event of Disability: Accidental injuries can result in temporary or permanent disability, restricting people from working. The loss of income that results from this can have serious consequences for the individual and their family, affecting their financial stability and future plans. Accident insurance protects your income by compensating you for income loss due to disability caused by accidents.
Customized Coverage: Personal accident coverage, like term coverage, provides customized coverage options based on the individual’s needs and lifestyle and with the help of a term insurance calculator one can easily come up with the sum assured suitable for the given policyholder. Policyholders have the ability to choose from several coverage features, including:
- Accidental death benefit
- Permanent disability benefit
- Temporary Total Disability Benefit
- Medical expense reimbursement
- Ambulance charges coverage.
This flexibility allows the policyholder to create a comprehensive insurance plan that meets their individual concerns and offers appropriate protection against unexpected accidents.
Provides peace of mind: Individuals can acquire comprehensive protection by combining term insurance with accident insurance. This comprehensive approach to insurance ensures that the policyholder’s loved ones are protected in all possible scenarios.
Life’s unpredictability often results in unexpected crises. While we cannot control such events, having the safety net of a life insurance plan can be extremely beneficial. Life insurance not only protects your family, but it also provides financial security, allowing them to pursue their life goals.
Differentiating between term and personal accident insurance.
Purpose: Personal accident insurance focuses on injuries and problems caused by accidents, whereas term insurance protects against loss of income due to death.
Coverage: Term insurance pays a fixed sum upon death, but personal accident insurance covers a variety of situations such as injuries, disabilities, and accidental death.
Premiums and Costs: The cost structures differ, reflecting the diverse coverage provided by each category.
Policy Duration: Term insurance normally lasts for a set period of time, whereas personal accident insurance is a one-year renewal contract with the option to renew for life.
Beneficiary: Term insurance benefits the nominee in the event of the policyholder’s death, whereas personal accident insurance provides coverage to the policyholder in case of injuries or disability.
Term insurance covers death, disability, and, in certain circumstances, critical illness, whereas personal accident insurance only covers disability and accidental death. Term insurance provides a wider scope and protects against a variety of life uncertainties, including illnesses. Personal accident insurance, on the other hand, is more specific, focussing on coverage for accidents and the aftermath. The choice between them is based on personal needs, with term insurance providing a broader safety net.
Conclusion
In today’s changing personal financial market, the decision between term insurance and personal accident insurance is based on individual needs and circumstances. Understanding the complicated nature of these insurance products enables individuals to make informed decisions that are in line with their financial objectives and aspirations.
