Personal Accident vs. Life Insurance: What’s the Difference?

by Rosie Esplana

September 21, 2021

A tragic accident can happen in a fraction of a second. Serious incidents that result in the amputation of a limb or the death of a person can occur anywhere. Accidental deaths can occur at home, at work, or while driving.

According to CDC mortality figures, over 130 thousand people died in accidents in 2013, with the following being the leading causes:

Falls that occur unplanned
Accidents involving motor vehicles
Poisoning by accident
While there are actions you may take to reduce your chances of dying in an accident. However, if this occurs, life and personal accident insurance can provide income to you or your grantee.

Life is incredibly doubtful. Anything might happen at any time. You get insurance to protect yourself financially. However, are you debating whether to buy a personal accident policy or a term policy?

If you answered yes, let me inform you that buying one or both of them may or may not meet your needs but both are beneficial to any of us. Let’s look at the differences between personal accident insurance and term insurance to get a better idea.

Let’s break down these insurance jargon right now to find the differences.

Personal Accident Insurance: It’s Better to Be Safe Than Sorry!

Most of us are so preoccupied with covering ourselves with a health care or life insurance policy that we almost overlook the need for personal accident coverage and long term care.

Health insurance plans may pay for medical expenses and life insurance may recompense in the event of the insured’s death. The financial losses incurred as a result of an accidental injury with dreadful consequences such as temporary or permanent disabilities?

So, let’s go down what personal accident cover entails.

A personal accident insurance policy covers you in the case of a tragic accident or an unpleasant event. To put it another way, you’re earning your daily bread and butter for daily basis. It is crucial since it offers you comprehensive coverage.

Major accidents can put your long-term financial future in jeopardy. It makes no difference whether you are a salaried employee or a business owner. Such a calamity, which renders you immobile and halts your source of income, is troublesome in and of itself.

If you want to protect yourself from an unexpected occurrence and you might consider purchasing a personal accident policy. This will ensure that you are covered even if you have minor mishaps.

Term Life Insurance: Ensure the Financial Future of Your Family

One day you’ll be simply a memory for some people,” someone wisely observed. Make an effort to be a good one for securing family future.

It is preferable to think of our family and guarantee their financial health and not to risk. Term life insurance comes into play at this point.

A term insurance is a type of life insurance that you can buy for a specific amount of time in insurance companies. The insured pays premiums on a regular basis, after which the death benefits are given to the nominee.

Example:

Don’t make the same error that our friend Alex made a few years ago that made him a devastating regret.

Alex had chosen an excellent term insurance plan after conducting thorough research and knowing the benefits to get a higher premium plan. With the base plan, he had included the riders which is a group personal accident.

He had made plans for his family’s financial security as the family’s sole breadwinner. When the time came for his family to benefit from the plan, they were not able to do so. Alex had failed to adequately notify his family about the policy.

It’s usually a good idea to let the nominee know if you’ve decided to invest in a term plan. He or she will be able to claim the coverage for which you have been paying annual payments.

Purchasing life insurance coverage ensures your family’s financial security in the event of your untimely death. It is entirely up to you whether you wish to benefit your nominee by receiving premium payment. Because death is such a delicate subject, you should carefully consider all of your options.

But, What Is the Distinction?

A term life insurance policy protects you if you die as a result of an accident or a natural disaster. A personal accident policy, on the other hand, only covers death, loss of limbs, two eyes, loss of one limb or one eye, permanent entire disability, permanent partial impairment, or permanent total disablement caused by accidents.

Personal accident insurance does not cover death caused by natural causes. But, in both circumstances, what is the key element impacting your premium?

The answer is as follows:

One of the most important factors in deciding your term life insurance rate is your age. Your occupation, on the other hand, plays a significant effect in deciding your personal accident insurance rate.

There are three different sorts of risk categories: Risk Class 1 includes teachers, bankers, managers, lawyers, and other professionals. Class 2 includes those who work with garage machinery, contract construction labor, and light motor vehicle drivers, among other things. People who operate in hazardous environments, such as mines or laying high-tension cables, are covered under Class 3.

The pricing reflects the differences in risks supplied by personal accident insurance and term life insurance. This also means that the cost of a personal accident policy is less than the cost of life insurance.

Your decision is crucial!

Now that you have a comprehensive understanding of the meaning and distinctions between the two insurances. Make your decision now for judgement.

Investing in the correct term life insurance is a prudent move and should be your top priority. However, if you’re more concerned with expanding your life insurance portfolio and ensuring complete coverage. The reason for this is that personal accident insurance only covers injuries and impairments caused by accidents. Term insurance, on the other hand, does not cover loss of life and disability caused by accidents.

It is preferable to get a term insurance plan and a standalone personal accident policy rather than a a false hope. The coverage offered by a term insurance plan is more comprehensive than that of a rider. Remember that a personal accident policy would cover any additional risks not covered by your life and health insurance coverage.

Accidents and death are inevitable. While bodily injury can make it difficult to work, death can put your family in a financial crisis. When you can take all of the precautions to avoid accidents by purchasing a personal accident policy, you can confidently face the difficulties that life throws at you.

MGS Insurance Company is here to help you with both services and finding better ways to deal with any future issues that may arise.