Life Insurance :- There are fundamental differences between life insurance and accidental insurance. Knowing what they are can help you choose the right coverage for yourself.
among the different types of personal insurance products that you can avail, life insurance and accidental insurance are two of the most common. Although there are a couple of features that overlap, both life, and accidental insurance are conceptually different from one another. Getting to know what these two insurance products are and how they differ from each other can make sure that you get the right kind of protection for yourself. Continue reading to find out more about them.
What is Life Insurance?.
Life insurance is an agreement between two parties – an insurance provider and a purchaser, also known as the policyholder.
Here, the insurance provider promises to pay a certain sum of money, known as the death benefit, to the policyholder’s nominees in the event of the former’s death. In exchange, the policyholder is required to make periodic payments, termed as premiums, to the insurance provider. This death benefit would only be payable to the policyholder’s nominees if the former’s death occurs during the tenure of the life insurance policy.
What is Accidental Insurance?
In accidental insurance, the insurance provider agrees to pay a certain sum of money in the event of an accident involving the policyholder. In the case of the accidental death of the policyholder, the sum assured amount under the policy would be paid to the nominees. On the other hand, if the policyholder merely suffers total or partial disablement, the amount would be paid directly to them instead.
The amount that’s payable under an accidental insurance policy may vary depending on the extent of disability or death of the policyholder.
What are the Differences Between Life Insurance and Accidental Insurance?
There are quite a few differences between a life insurance policy and an accidental insurance plan ranging from the coverage to the premiums of the plans. Here’s a quick look at the different points of difference.
Cause of Death
The death benefit listed under an accidental insurance policy is paid out to the nominees only if the policyholder’s death arises out of an accident. Such plans tend to be very specific and are designed to provide coverage for only one cause of death.