Difference between Personal Accident Insurance and Term Insurance Explained

source: arthasakshar

A term insurance policy provides a death benefit, which means that if any unfortunate incident happens to the insured person, the sum assured will be issued to the nominee. On the other hand, in case of a personal accident insurance plan, the insurer will pay the sum assured only if the insured individual is severely injured or passes away in an accident.

Since some of the premises of these policies overlap, there is a confusion that often develops among them. However, both of them have some important differences. Keep reading to learn more about personal accident insurance vs. term insurance plans.

A term insurance is a life insurance policy providing financial coverage to a policyholder wherein the 'term' of the policy and sum assured is chosen by the policy owner. It is called so since this insurance policy gives a predetermined period of coverage.

You can purchase a term life insurance plan to provide financial protection to your loved ones in your absence. This means even after you suddenly leave for your heavenly abode, your family can maintain a normal lifestyle.

A Personal Accident Insurance plan is quite different from a term life insurance policy. This insurance plan offers financial coverage to the nominee of the insured person in case of the latter's sudden death due to an accident, accidental injuries, temporary or permanent disabilities, partial or complete disabilities, etc. The personal accident insurance policy also covers accidental disabilities like loss of limbs, eyes, and speech.

A personal accident insurance plan acts as an income protection, wherein the maximum coverage limit and rate of premiums depend on your income and profession.

1. Level Term Insurance Plan

2. Increasing Term Insurance Plan

3. Decreasing Term Insurance Plan

4. Term Insurance With Return of Premium Plan

1. Individual Accident Insurance

2. Group Accident Insurance

Another type of personal accident insurance plan is group accident insurance. In general, this insurance policy is taken by the employers of many organisations to provide coverage to their employees. This insurance plan comes with a discount on premium amounts based on the group size. 

Group accident insurance is a good incentive for small-scale enterprises since it is obtainable at a reasonable cost. However, this insurance policy is comparatively less efficient than an individual plan as it has limited advantages.

3. Child Personal Accident Cover

Often, children are prone to unforeseen accidents. A child personal accident cover guarantees that your child is effectively protected against accidents and injuries. This plan comes with a substantial amount of insurance and provides coverage for medical expenses as well as temporary or permanent disabilities.

After going through the explanation and types of term insurance and personal accident insurance policy, take a look at their differences

Mentioned below are the easy steps by which you can purchase a term life insurance plan online:

Step 1: Visit a trustworthy insurance provider

Step 2: Take a look at the different term insurance plans the insurer offers

Step 3: After choosing the term insurance plan that suits you the best, proceed to its online application process.

Step 4: Fill out the term insurance application form online

Step 5: Attach the necessary documents specified by the insurance provider

Step 6: After completing these formalities, click on the 'Submit’ option and go to premium payment online.

Upon completion of all these steps, your insurer will thoroughly verify your application form and the attached documents. Subsequently, after successful verification, you will receive the policy documents by email.

After you have gone through the steps to apply for a term insurance plan online, take a look at the steps to claim a personal accident insurance policy.

The following are the steps to buy a personal accident insurance plan online:

Step 1: Fetch a reliable insurance provider

Step 2: Go to the ‘buy online’ option and then navigate to the ‘personal accident insurance’

Step 3: Compare the offers and choose a plan that suits you the best.

Step 4: Select the ‘calculate premium’ option from where you can get the detailed premium value of the plan. If the displayed premium seems reasonable, select ‘proceed’.

Step 5: After this, you have to enter your personal details like name, mobile number, email ID, address, etc.

Step 6: After doing this, you have to fill out the application form and correctly mention the name of the individual stated in the policy.

Step 7: Thoroughly cross check the details you have entered and click on the ‘mode of payment’ option and choose your preferred payment option.

Step 8: Click on ‘Submit’

Upon completion, your application for buying a personal accident insurance plan will be submitted successfully.

Now you should have a detailed idea about personal accident insurance vs. term insurance plans. Hopefully, this will help you to buy your appropriate term insurance and claim personal accident insurance. However, make sure to go through the terms and conditions of insurance policies minutely since they differ from insurer to insurer.