Why Should you Buy a Personal Accident Cover When you Already Have Term Insurance?


Life is full of unexpected turns. Being complacent is no longer a luxury one can afford to have. Insurance policies of various attributes have indeed made a foray into an individual’s life. It will be correct to say that awareness regarding policy covers has crept in and people are inclined to go ahead and do their bit when it comes to securing their family’s future. A rise in the number of private life insurance companies has also made people realize the importance of insurance in one’s life. Choosing the right policy which would help the immediate family during that time of distress is completely dependent on the policyholder and his awareness about the insurance product portfolio.

From the Stable of a Long-Term and Short-Term Insurance Portfolio

Long-term Insurance care and Accident Insurance coverage are very distinct from each other. Term insurance is a part of life insurance whereas accident insurance is from the general insurance portfolio. Both have their own identities & the policyholders are generally well versed with the way their functioning takes place. However, there is still a lot more that can be done when it comes to educating the end users. When planning to give a safe and secure future to your family, a meaningful term insurance plan is the option to look into. This insurance is cheap compared to other life insurance policies as there is no maturity benefit involved in it. It is basically taken in order to curb that unforeseen risk of not being present tomorrow. The long-term insurance portfolio has a range of benefits to offer and cover almost all the aspects that a policyholder is looking out for.

Always Seek for that Assistance During Distress

Lifestyle today has become erratic. It becomes all the more important for an individual to plan his family’s future well. Selection of an ideal term insurance policy will not only ensure to provide adequate coverage to the family members but also give a sense of satisfaction to the individual. In all fairness, a breadwinner of the family indeed needs to plan it out in advance as to what would be the ideal policy & coverage he or she is looking out for. The support is such that even in case of a permanent disability, the coverage amount is given to the family.

It makes a lot of sense of taking up such term insurance policies as it provides that necessary cover to the family members during a time of distress. The best part is the amount associated with it. One does not have to spend a huge amount as far as the premium is concerned. Being a policy with no maturing benefits, the premium happens to be lesser as compared to a regular insurance policy. The idea is to provide that necessary financial support so that the family members are able to revive themselves and come out of an alarming situation.

The Indian Insurance Phenomenon

Accident Insurance gives large cover for a lesser premium. It covers permanent and partial disability that has occurred due to the accident. It is well to be noted that whenever a person meets with an accident, the first and foremost thing that comes in anybody’s mind is whether his or her immediate family is well equipped to handle the immediate effect of it. With most of the insurance companies venturing into providing accident cover as well, options are plenty to choose from. It all boils down to the premium amount as well as the range of term insurance benefits each company has to offer. When we talk about the Indian Insurance Industry in particular, privatization played a major role in enhancing the knowledge of an average insurance buyer. It gave him an access to loads of policies and also helped him with the benefits which he could further evaluate. The drift that insurance sector saw was huge since before privatization Insurance was mostly done through Life Insurance Corporation of India. But with the advancement of global players in the Indian market, there was a multi fold increase in the range of Life Insurance and General Insurance policies. People became more aware of the long-term insurance products and the benefits associated with them and hence started to take further interest in going ahead with availing insurance. IRDA being the regulatory authority has also played a major role in maintaining that transparency across all the players thus making policyholders aware of what is being offered to them.

Long-Term Cover with Transparency and Benefits

So when you are looking out for a limited period of time and a fixed payment, term insurance offering is the right platform to go for. Term insurance is less expensive and the best way to cover one’s life. It is ideally taken for income replacement needs of an individual. It is as good as a normal insurance policy and an individual has to ensure that timely payment of policy is done with no lapses. It is a pure death benefit and provides coverage for the financial responsibilities of the beneficiaries.

As the name suggests, the policy is specific to a term and hence the benefits received are aligned to it. In case of a life insurance, it is the entire lifespan and not one particular term and hence the premium associated is much higher and a longer duration of time. Once the term insurance expires, there is always a scope of reviving the policy by paying for it further. One of the most commonly purchased term insurance is the annual renewable term where the premium is paid for that one year.

The premium paid is on the basis of assuming that the insurer may die during that span and hence the coverage will be given to his beneficiaries. As the age of the insurer increases, so does the premium paid. At times it becomes financially non-viable and would eventually exceed a permanent policies cost. Level term life insurance is also one type of term insurance where the premium paid is said to remain the same for a particular duration of time. The common term periods are 10, 20, 30 years. This is a much more viable form of term insurance as the premium paid remains the same throughout the span hence reducing the burden on the policyholder’s pocket. Another commonly taken term insurance is the return term life insurance where some part of the premium is returned to the policyholder as policy span is expired.

Understandably, the premium taken for this term insurance is higher as against the regular term insurance policies. In a term insurance, the term programs may expire without even paying out but in case of a regular insurance, there will always be a payout on maturity.

Accident Cover and Its Importance in one’s Life

Accident insurance is completely different from a term or regular insurance. In an event where the policyholder injures himself or expires, accident insurance comes into the picture. It covers that part of a medical emergency which has come into the foray and needs to be taken care of. Though there are a lot of rules and regulations associated with it, the primary idea is to give that immediate financial benefit to the policyholder and the family members. Today, accident insurance is taken not only by individuals for themselves but also by corporates for their employees.

So when an accident either results in death or permanent or partial disability, accident insurance cover ensures that medical expenses, as well as loss of income, are taken care of. Be it a salaried or a self-employed individual, both are bound to get benefited out of it as the regular income for the family keeps on coming. As discussed earlier, people have become more and more aware of the risk that life brings nowadays. An accident cover gives an individual that ray of hope where he can always bank on the insurance company to pay the expenses and also provide that necessary financial support to the immediate family members. Some of the main points that are taken into account under accident insurance umbrella are-

  • Death cover where 100% capital sum insured is payable.
  • Loss of two limbs/ both eyes/ one limb/ one eye where 100% capital sum insured is payable.
  • Loss of one limb or eye where 50% capital sum insured is payable.
  • Permanent total disablement e.g. paralysis due to an accident where 100% capital sum insured is payable.

Accident Cover – A Hassle-Free Step to Securing Future

The accident policy is hassle-free as it does not require any prior medical checkup. Besides, one can avail a good, substantial cover and range of financial benefits related to life support benefit and child education too. Another significant difference between Term Insurance cover and Accident cover is that in former, payout happens due to death or severe injury.

Term Insurance covers death due to illness or disease whereas Accident insurance does not take that into consideration.

Term Insurance and Accident insurance both cover death from an accident.

In case of a drug overdose, term life provides the benefit whereas an accident cover does not.

We can hereby say that term insurance provides coverage to an individual if he dies within that specific period or term. Irrespective of the nature of the death except for suicide, an individual shall be paid. Investing in a good term insurance policy is a good option however if one is looking out for an entire package, accident insurance cover should always be taken into account. The fact of the matter is that if you are working in a high-risk environment, taking an accident cover will always benefit you. Even the cost associated with the premium is lesser as compared to the regular insurance and hence makes it all the more suitable. One of the most favorable reasons to buy an accident cover is that it covers all forms of permanent or temporary disablement. So that range of loss gets covered in this part.

Be Wise and Choose Both

We are all subject to a very high-risk environment today. Losses occurring from natural calamity or otherwise take a toll on an individual and immediate family as well. So in order to ensure that adequate measures are taken to sustain any damage caused, it is very important for one to understand and gauge the effect of the right policy. Long-term insurance policies have always played a key role in being a part of an individual’s life.

Accident covers are no doubt essential and in a way add to the overall benefit given to a policyholder. Just imagine having a good term insurance and an accident cover; it will ultimately lead to an overall exposure to the various facilities and benefits for not only the policyholder but to the family as well. When one takes into account the long-term benefits, term insurance is the way to go as the span of the entire policy is fixed but in case of an accident cover what immediately comes into mind is the sudden risk and its pre-evaluation on one’s life. To diminish the unpredictability, it becomes pivotal for a policyholder to take into consideration the overall offering of various policies.

In India, where there is a range of insurance companies offering varied policies, an individual has to be specific and should be aware of what he is looking out to have. Term insurances have always been regarded as one of the most preferred types of insurance since they neither involve a lot of paperwork nor have any hefty premiums associated. Same is the case with an accident cover too where unlike a medical insurance, the paperwork is very less and the premium is also affordable. So, it is always advisable to go ahead with both term insurance package as well as an accident cover just to ensure that all the gaps are filled with no scope of any loophole. After all, it is about having that level of safety, reliance, and comfort by choosing the right mix of both the policies.

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