When you decide to get an insurance policy, there are loads of things to be considered. First off, you think about the kind of policy you should get. You consider the features, the benefits, and so on. In this regard, you might be considering two types of insurance – term insurance and accidental insurance. So, what are the differences between the two, and how is one better than the other? Let’s find out!
The Tenure
All term insurance plans come with an extended tenure of at least ten to twenty years or more. If you meet the age eligibility criteria when the policy is about to expire, then you can even renew your policy. So, if you took the policy for twenty years when you were twenty-five, then you can extend it till your retirement to make the policy more effective.
But personal accidental insurance typically has a shorter tenure of one year. So, the idea is to renew this cover every year such that you can keep getting the benefit.
The insurance coverage
The coverage for term insurance plans varies from one insurer to another and it depends on a lot of factors. However, be assured that it is going to be more than what is received for an accidental insurance cover. For a term plan, the policyholder can get twenty times of his/her annual income.
On the other hand, you receive a cover that’s ten times the yearly income for accidental insurance.
Receiving the benefits
A term plan offers death benefits. It means the beneficiary receives the sum assured in case of the policyholder’s demise. If the policyholder gets a term plan without any added riders, then they will only get coverage for the death that arises from natural causes. No benefit is offered to the beneficiary if the policyholder dies due to an accident.
As the term implies, accidental insurance offers benefits for demise that is a result of accidents. In addition to that, the policyholder can make their claim for paying the medical bills if they are injured in the accident. In this case, no claims can be made by the beneficiary if the death of the policyholder is from natural causes.
Adding riders to the policy
The policyholders can include riders like accidental cover and disability cover to the policy. These riders increase the premium to a minimal amount, although they let the policyholder increase the coverage.
But if you get the accidental insurance, then you will get accidental death and disability as the prime covers under the plan.
The distribution of policy benefits
After the demise of the policyholder, the beneficiary receives their sum assured as a lump sum or a monthly income based on whichever option is chosen. In addition to that, they can also choose to get a part of their sum assured as the lump sum amount and the rest as a monthly payout. It will help the beneficiary to pay off the policyholder’s debt while making sure they have a monthly income to support themselves.
Visit here to calculate term insurance premium.
On the other hand, you cannot get a monthly payment from accidental insurance. So, the sum assured under this policy can only be received as the lump sum payment given one time.
The best thing you can do in this regard is to get a term plan with an accidental injury rider. It will offer comprehensive coverage.
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