Planning is an integral part of life. We schedule our work, savings, family requirements, and eventually our future. However, surprises also take place in life. Some surprises are pleasant, and others are not. This is the reason why insurance plays an important role. It guarantees protection for your family regardless of a sudden change in life.
In modern times, the majority of people are aware of term insurance. A large number already search for the best term plan in India. However, there is one more cover that very few people talk about, and that is personal accident insurance.
The objective of this article is to familiarise you with both terms, insurance and personal accident insurance. You will understand what a term plan is, what personal accident insurance is, and whether you need both. Everything is explained in easy words, supported by practical examples.
What Is a Term Plan?
A term plan is the most basic type of life insurance. In case of your death within the policy period, it provides your family with money. This is the complete story. There are no savings and no returns. It is entirely protective. You pay a consistent amount annually. This amount is referred to as the premium. In exchange for your payment, the insurance company agrees to pay a large sum to your beneficiary if an unfortunate event occurs. This financial assistance is useful for your family to cover daily expenses, pay rent, tuition fees, and loans, among others.
Why People Look for the Best Term Plan in India
People desire tranquillity. They need reassurance that their family will be okay even when they are not around. This is one of the reasons why many people are looking for the best term insurance in India.
A good term plan brings along:
- Large life cover at a minimal cost.
- Smooth claim process.
- Flexible payment options.
- Additional riders for extra protection.
The younger you are, the lower the insurance premium will be. Thus, purchasing at an early age is always recommended.
What a Term Plan Does Not Cover
This is something very significant to comprehend. A term plan gives a payout only in one situation. That is the death of the policyholder. If you live through an accident but are wounded, the term plan remains of no use. If you lose a hand, a leg, or eyesight, then the term plan does not cover these losses either. Here is the situation where many people get confused and feel trapped. They are living, but their working capacity has greatly reduced. Their income goes down. Medical treatment costs are going up. They are having a hard time in everyday life.
The void created in this situation is taken care of by personal accident insurance.
What Is Personal Accident Insurance?
Personal accident insurance can be defined as an insurance policy that provides coverage for injuries sustained as a result of accidents. It disburses money if the accident results in:
- Death
- Permanent disability
- Partial disability
The major distinction of a term plan is that it only pays during death; on the contrary, personal accident insurance covers you in the event of survival in case of an accident.
To illustrate, if an accident leads to the loss of a limb or eyesight, the policy will pay a lump sum amount. This amount can be spent on surgery, rearranging your home, or day-to-day living.
Why Accidents Are a Real Risk Today
Accidents are unpredictable and can occur at any place, on the road, at work, and even at home, or while traveling. India has a high number of fatal road accidents every year. The office is not a safe place either; minor and unintentional actions could lead to major injuries.
Accidents have the unpleasant feature of not giving any prior notice. They occur in just a blink of an eye. The healing process takes a long time and may even last for months or years. Hence, depending solely on the top-notch term insurance plan in India might prove to be inadequate.
Term Plan vs Personal Accident Insurance
Let us make the difference clear using very simple terms.
A term plan comes into play when the insured person passes away, and thus it becomes a protection for the family. On the contrary, in the case of personal accident insurance, it is the insured who is protected against any injury or disability. A term plan concerns the family’s future and secures it. In contrast, personal accident insurance is concerned with and secures the present life of the insured. They are both having different duties to perform. One does not take the place of the other.
Do You Really Need Both?
The simple answer is yes, for the majority of the people. If you are working, your pay goes to your family. If an accident occurs and you are not able to work, your pay may be stopped too. But bills will not stop. Life will not pause. The best life insurance policy in India is effective only when you are no more. But then, what about the case when you are alive but not able to work? This is the reason why both policies ensure complete security.
Who Should Strongly Consider Personal Accident Insurance?
Some individuals require it more than others.
- If you are commuting every day for the job, you need it.
- If your work is manual, you need it.
- If you are the one who brings money home, you need it.
- If you are taking a loan, you need it.
Even students and housewives can take advantage because every person is at risk of accidents.
Is Personal Accident Insurance Expensive?
No. This is the good news. Personal accident insurance is very cheap indeed. The premium is significantly lower than what most people guess. You could get very good protection for a small amount paid yearly. This is what makes it easy for you to keep it as a supplement to your term plan.
Can You Add Accident Cover to a Term Plan?
Yes, many term plans allow adding an accident rider. Such a rider provides additional payment in case of death resulting from an accident. Yet, it is always prudent to note that riders primarily deal with accidental death only. They might not extend the full disability coverage. An individual personal accident policy provides more comprehensive coverage. It includes death, disability, and income loss.
Real-Life Example to Understand Better
Let’s consider a very straightforward example. Ravi is a 35-year-old man. He has purchased India’s best term insurance policy for one crore, with a coverage of one crore. One day Ravi gets involved in an accident. He is saved, but a leg is amputated.
His term insurance does not give him any amount; he is still alive. Now, Ravi has lost his previous capacity to work; thus, his income falls off considerably. The medical expenses are rising. Ravi would have gotten an accident payout if he had purchased a personal accident policy. The amount could have been used to facilitate his life.
How Much Cover Should You Take?
In the case of a term plan, a cover that can replace your income for a number of years should be chosen. Besides, all loans should be cleared as well. For personal accident insurance, the cover should be your lifestyle support in case of a long period of not being able to work.
There is no one exact figure. It depends on income, family needs, and associated risks.
Common Myths About Accident Insurance
Accidents don’t happen to them, is the belief of many people. This is a very common error.
Their office insurance is enough, so they think. It is more often than not insufficient. They think it is not necessary because they already have health insurance. Health insurance pays for the hospital. It does not cover lost income. This underlines the fact that personal accident insurance is different and important.
How to Choose the Right Policies
In selecting the best term plan in India, look for:
- High claim settlement ratio
- Easy terms
- Reliable insurer
When selecting personal accident insurance, check:
- Disability coverage
- Claim process
- Clear policy wording
Carefully read the policy details. Do not hesitate to ask questions if necessary.
Conclusion
Insurance is not a fear-based thing. It is a care thing. It is about planning today so that tomorrow is safer. The best term plan in India secures your family’s future. Personal accident insurance secures your ability to live the way you want if life takes an unpredictable turn. Financial security is very strong and is created by combining them. They need to be defined as life and living. In case you want peace of mind, truly, then do not go with one or the other. Make wise choices and pick both.
