Difference between Personal Accident Insurance and Term Insurance Explained

What Is a Term Insurance Plan?

What Is a Personal Accident Insurance Plan?

What Are the Differences Between Personal Accident Insurance and Term Insurance Plans?

Following are the key differences between personal accident insurance and term insurance policies:

Aspects

Term Insurance Plan

Personal Accident Insurance Plan

Tenure

A term insurance policy can last for 10 years, 20 years, or more.

The tenure of a personal accident insurance policy is one year.

Renewals

There is no need to renew a term insurance plan.

Personal accident insurance plans must be renewed every year for continued coverage.

Coverage Amount

The maximum amount of coverage is up to 20 times of your yearly income.

The maximum coverage amount is usually 10 times of your yearly income.

Disability Cover

The basic term plan does not include any disability cover, but riders like accidental and disability covers can be added.

The major covers of a personal accident insurance plan are accidental death and disability.

Benefit Distribution Mode

In a term insurance plan, the sum assured is claimed as a monthly income, lump sum, or combining both.

In a personal accident coverage plan, the sum assured is claimed as a lump sum amount only.

Risk Factor

Term insurance plans provide coverage against natural death. That means, if the life insured dies in an accident, no compensation will be given under the basic term plan.

A personal accident insurance policy offers coverage only for accidental death or disability.

Compensation

The beneficiary gets the insurance money in the event of the insured individual’s death.

In a personal accident insurance plan, if an insured person gets injured in an accident, the medicinal treatment charges can be claimed as per the policy.

What Are the Types of Term Insurance Plans?

What Are the Types of Personal Accident Insurance Plans?

Steps to Apply for a Term Life Insurance Plan

Steps to Buy a Personal Accident Insurance

FAQs about Personal Accident Insurance vs. Term Insurance

What is the age limit required to opt for a term life insurance plan? up-arrow

Any individual of age between 18 years and 65 years can opt for a term insurance policy whenever they need it.

What is not covered under a Personal Accident Policy? up-arrow

Personal accident insurance cover does not provide any coverage for intentional injuries, injuries due to alcohol or drugs, wounds caused due to war, AIDS or HIV, past illnesses, injuries due to sports, etc.

What is the age limit of personal accident insurance? up-arrow

The minimum age limit for the personal accident insurance policy is 18 years, and the maximum age limit is 65 years.