Make Yourself Aware with Personal Accident & Term Insurance

Life Insurances 185 views

Many of you will surely agree on the fact that people are usually in a state of confusion when it comes to selecting an insurance plan so as to ensure that their insurance portfolio will remain secure. However, by looking at the facts and queries it would not be wrong to say that large number of people are generally confused about the difference between personal accident and term insurance. And, they are not aware if it serves their purpose to invest in either or may be both.

Well, in this article, you will get to know how personal accident insurance and  term insurance are differ.

What is term insurance?

When it comes to term insurance, it would not be wrong to say that in the past few years, it has gained a lot of popularity. Basically, a term insurance provides you with the life cover for a definite period of time. However, if somehow the insured person expires while the policy is in hands, there is no denying on the fact that the nominee will get the benefit amount.

Moreover, one of the biggest perks of a term insurance is the fact that it gives you the benefit of a low premium. Well, it is because there is no maturity benefit which is associated with this term plan, and it only comes with the death benefit.

However, it would not be wrong to say that there are some plans that give payback on the premiums, in case the policyholder survives. In fact, you can also get the tax benefits under Section 80C of the Income Tax Act, 1961.

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What is personal accident insurance?

As far as personal accident insurance is concerned, it offers the coverage against death by accident or permanent disability happened because of accident. However, one thing that needs to be mentioned here is the fact that this insurance have not gained enough popularity as yet, and many insurance providers/agents are forcefully selling you this. Moreover, if you are a young gentleman, and are interested to secure your insurance portfolio, you should consider to invest in a personal accident insurance policy just to make sure that you have the coverage, even if you meet with a minor accident in the future.  In fact, it is more encouraging that in reality that a personal accident insurance is affordable, thus you don't have to think twice before investing in it.

What is the difference between personal accident and term insurance?

Well a term insurance is completely different from a personal accident insurance because it provides the coverage for death occurring from any reason either natural or accidental. While on the other hand a personal accident insurance gives benefits only when there is death or permanent disablement, partial or permanent disablement, and temporary or complete disablement occurred due to an accident. And, it does not consider death caused by natural reasons.

Not only this, in fact just like your age is the determining factor for the premium of term insurance, and your occupation is the deciding factor for the premium that you pay for the personal accident insurance. Well, there are three risk categories here: Risk category one covers those people who are engaged in the managerial work, lawyers, teachers, bankers, etc. Second risk category includes those people who are engaged in contractual building work, garage mechanics, drivers of motor vehicles etc. Third risk category is having the people who are involved in hazardous professions such as mines, installation of high tension wires, etc.

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Which should you invest in?

Technically speaking, investing in a good term insurance policy should be your first priority so as to secure the future of your family. Moreover, if you want to secure your life insurance portfolio, and looking for complete protection, you can go for a personal accident cover. Well, this is majorly because it provides you with an important security against the disability caused by the accidents which your life insurance policy will not include.

In addition to, your term insurance policy will not give you the coverage for temporary disablement or partial disablement, and also it will not pay for the medical expenses which arise out of your accident. Not only this, if you are involved in the high risk professions, you must give attention in mixing up your life insurance policy with a permanent accident insurance policy, and that too at an affordable cost.