Personal Accident Insurance vs Term Insurance

People are often confused between personal accident insurance and term life insurance. Term life insurance is a type of life insurance plan. It is pure risk cover. The nominees get the death benefit on an untimely demise of the policyholder within the tenure of the plan. This plan offers no survival benefits.

The personal accidental plan covers for death in an accident or disabilities due to an accident. This is a must have for a frequent traveler.

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Personal Accident Insurance vs Term Insurance

Term Life Insurance

Availing term life insurance is a good choice if you want to provide financial protection to your loved ones or dependents, in case of an untoward demise. It is the most affordable type of life insurance plan, available today. It is called ‘term’ as the policy lasts for a predetermined time-frame and then lapses.

See Also: Best Term Insurance Plans In India

The policy can be renewed on or before the due date. The sum assured is paid to the beneficiary, if the insured dies within the policy period. The plan offers no maturity benefits.

Personal Accident Insurance

A personal accidental insurance policy is gaining momentum among the masses, because of the significant benefits offered. A policyholder enjoys complete financial protection against uncertainties like accidental death, permanent and temporary disabilities, major injuries and so on resulting from an accident.

See Also: Personal Accident Insurance - Better Late Than Never

The nominee gets the sum assured if the policyholder dies in an accident. The plan comes with many riders to offer complete financial protection to the dependents or in some cases, to the policyholder himself. Personal accidental insurance plan is a necessity today, with growing number of road accidents in India.

Inclusions and Exclusions of Personal Accident Insurance:

Inclusions	Exclusions
Life support benefit	Natural death
Accidental death	Suicide or self-injuries
	Non-allopathic treatments
Child education support	Committing a criminal act
Medical expenses/ hospitalization charges	Pre-existing disability or injury
Daily allowance	Influence of intoxicants
Accidental dismemberment

Types of Deaths Covered and Not Covered by Term Insurance

Term insurance covers natural and accidental death, but not suicide. Suicide is covered a year after availing the term life plan.

In case of death in accidents, the policyholder should not be driving under the influence of alcohol or drugs. Self-inflicted injuries are not covered.

See Also: Term Insurance Plans with Return of Premium

The insurer denies the claim of the insured in term life plan,  if death occurs because of AIDS or HIV. No payout if the insured expires because of overdose of alcohol or drugs. The insurance company rejects the claim if the beneficiary murders the policyholder for monetary benefits, but the crime has to be proven in courts. Deaths due to natural calamities are not covered unless rider benefits are availed.

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