As life is unpredictable, accidents can happen anytime, anywhere. Personal accident (PA) insurance becomes necessary to protect against the financial burdens that may arise from unexpected mishaps. If you think having life insurance will suffice to cover your medical expenses, read to know why personal accident insurance is necessary.
Also, we are clearing the air around is personal accident insurance a life insurance?
What is Personal Accident Insurance?
A personal accident insurance policy offers comprehensive financial security to policyholders and their families. These plans are designed to safeguard against unforeseen events like accidental death, partial or total disability (temporary or permanent), or bodily injury in an accident.
- Not just major accidents, PA insurance also covers minor injuries such as fractures and dislocations. In addition, ambulance costs, hospitalisation charges, and many other related expenses are also compensated.
- In case a policyholder dies in an accident, the nominee receives the full compensation amount from the insurer.
- Personal accident insurance helps the policyholder's family keep their savings intact.
- If the insured person has dependent children (under the age of 19), the policy covers their education fees and medical expenses, as they are paid the compensation amount to complete their education.
- The medical expenses of the insured are compensated by the insurer if he suffers a permanent disability or death (eligible up to the sum assured).
- If there is a partial disability, only a portion of the sum assured is paid to the insured (depending upon the severity).
- The accident insurance plan can be renewed after suffering partial or temporary disability in a mishap.
Major Difference Between PA Insurance and Life Insurance
Having a life insurance policy not only provides financial cover but also helps to achieve financial goals like retirement plans, long-term and short-term goals, etc. On the other hand, personal accident insurance protects family members in case of the policyholder's accidental death or disability, which makes both covers different yet overlapping.
A life insurance plan's premiums are eligible for tax deductions when filing income tax returns. However, accidental insurance policy premiums do not offer tax benefits.
Life insurance is costlier compared to a personal accident policy because the latter is part of the risk covered by the former.
While life insurance does not cover medical eventualities and offers only death benefits to the insured person's family, an accident policy provides financial cover against the insured person's permanent total or partial disability. It also covers accidental dismemberment, burns, fractures, and other injuries.
Conclusion
The term life insurance covers the policyholder's death due to natural or accidental reasons. The personal accident insurance policy covers death and disabilities caused by an accident. It doesn't cover claims arising due to the natural death of the policyholder. Besides these two, we recommend evaluating health insurance plans for available benefits like cashless hospitalisation and free medical checkups. A health insurance plan is more a necessity than just an option.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis, or treatment. Please consult your general physician or another certified medical professional for any questions regarding a medical condition. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.