Insurance is the most vital thing that will save our family and us from any mishap. However, owing to all those types of insurance, people often ask if they need a personal accident policy if they already have term insurance. Term insurance is pretty much essential, but coupled with personal accident insurance, this will give a little more protection. Let’s dig in a little further; now, differentiate the two, perhaps why you need both.
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Tuesday 18 Feb. 2025
What is Term Life Insurance?
We will first understand what term insurance is before comparing term insurance with personal accident insurance. Term insurance is a type of life insurance wherein financial security is provided to the insured person for a particular period, such as 10, 20, or 30 years. In case anything happens to the person during the term, be it death through illness or an accident, a lump sum will be paid out to the nominees.
What is Personal Accident Insurance?
It offers special cover, known as personal accident insurance, together with term insurance, especially provided for protection against any kind of injuries, disability, or death due to an accident. Thus, while the term insurance caters for the risk arising out of the mortality risk, personal accident insurance emphasizes such kinds of accidental diseases leading to a critical state of health such as:-
- Accidental Death The amount is due and payable all at once in one lump sum.
- Permanent Disability The policy takes care of all your medical expenses as well as the lost wages that you could incur from this permanent disability.
- Temporary Disability Your daily cash benefit will be awarded for the days that you can’t go to work.
The difference between the two types of insurance is that personal accident insurance covers injuries and disabilities from accidents, while term insurance doesn’t care about death.
Do you need these two types of insurance?
Having both in mind now, let’s find out the rationale for holding on to both. As I had mentioned earlier, term insurance would provide a very significant financial safety net to your family if anything were to happen to you. Personal accident insurance fills a completely different kind of gap, and here is why you should consider holding both:
Accidents Can Happen Anytime: Accidents are unpredictable. They can happen at any time, whether you’re at home, driving, or doing everyday activities. Personal accident insurance, on the other hand, provides compensation if you’re seriously injured or disabled in an accident, offering you financial support until you recover.
Financial Support During Recovery: If a temporary accident results in disability during which you cannot work, even the best-of-term insurance will be of no avail. That is where the personal accident policy comes in in cash benefits to ensure that your hospital bills and regular expenses are kept in check when you are undergoing treatment and again when you eventually return to your job.
Protection Against Permanent Disabilities: One of the possible consequences of the accident may paralyze you, and you will not be able to do your work, which will mean you cannot earn money for yourself and your family. It has money for the maintenance of standard living conditions when a person fails to fulfil his various jobs at least partially and makes life still easier as it gets used to its disabilities through permanent disabilities created from an accident. So, term insurance cannot protect them against permanent disability.
Affordability: One of the reasons that holds people from buying multiple insurance policies is cost. However, personal accident insurance is relatively inexpensive than life insurance policies. The best term insurance, though might have a higher premium because of the coverage, is very essential to cover at a much lower price and is thus financially wise.
Peace of Mind: There is no doubt that term insurance and personal accident insurance offer peace of mind. In any mishap, with both you and your family covered under both term insurance and personal accident insurance, you will always feel secure. Term insurance will protect the members of your family in case you die; personal accident insurance will protect you against the impact of accidents so you can concentrate on recovery.
Special cover for riskier activities: If you engage in activities that place you at much much greater risk than another individual, then you can bet your bottom dollar that you need personal accident cover. Personal accident cover offers cover for accidents in which one might sustain injuries while indulging in such a high-risk activity. Hence, this lifesaver comes in pretty handy if one has a very hazardous profession or hobby.
What Does Personal Accident Insurance Cover?
Personal accident insurance is one of those very versatile policies, covering most accident-related situations, but often before you buy it, it’s best to know what you can and cannot include in the policy. Some of the common scenarios that are covered by personal accident insurance are:
- Death due to Accident: In the same way, if death is caused by an accident, it pays a sum to the beneficiary.
- Permanent Total Disability: This is the insurance of extreme injuries, which pretty much renders you disabled in the extreme sense of permanent inability to work. For instance, loss of limbs or total loss of sight.
- Temporary Total Disability: It comes in the form of daily benefits where you cannot work due to temporary disability to work caused by an accident.
- Medical Expenses: Some personal accident policies provide medical expense coverage for injuries from accidents, examples include, hospital stay, surgeries, and rehabilitation.
- Accident Inpatient: Other kinds of personal accident insurance also cover hospitalisation against accidents, no doubt which may cause injuries at the shortest notice that require any medical attention at the hospital.
Conclusion: Do You Really Need Personal Accident Insurance?
This satisfies all your family’s financial requirements if you should go. Yet term insurance does it incompletely never aids protection against the chances of accident and injury with any disability feature to personal accident insurance. Hence if you require an overall protecting package then avail both.
Having both personal accident insurance and term insurance can ensure that you’re covered in a variety of situations. The best term insurance will secure your family’s future in case of death, but personal accident insurance will provide peace of mind and financial protection for injuries or disabilities that could result from accidents.
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