Personal Accidental Coverage When you already have a Term Insurance Plan: A Vital Requirement or A mere Expense?

Personal Accidental Coverage When you already have a Term Insurance Plan: A Vital Requirement or A mere Expense?PolicybazaarAverage Rating / 5 ( reviews)
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Term Insurance Plans are the most basic, simplest, and affordable form of insurance available in the market. The primary objective of term insurance plans is to mitigate the risk and hence they are also known as pure risk protection plans.

Along with the basic term insurance plan, companies and providers offer personal accidental coverage as an addition to the rider. Very often insurance seekers are stuck in the dilemma of choosing the right plan so that they can provide maximum financial security to their families.

If you are looking forward to buying personal accidental coverage when you already have a term policy in place, this quick read will help you to assess and analyze its importance and utility in real-time. Furthermore, we will be shedding light on some important tips and points you should keep in consideration when buying personal accidental coverage in the UAE.

Before we jump and dive into the nuances of personal accidental coverage let us quickly take a look at what exactly are term insurance plans and how do they work.

Term Insurance

A term insurance plan is a simple, affordable, and user-friendly insurance product that is offered by a lot of insurance providers in the UAE. Term insurance plans offer coverage for a pre-defined period which can be chosen by the insurance seeker based on their convenience and budget, known as the term of the policy.

A term insurance policy can have a term of a minimum of 5 years and a maximum of 40 years. An important point to be kept into consideration while discussing term insurance plans is that, if the policyholder passes away within the policy period only then the death benefit will be paid. However, if the policyholder surpasses the term of the policy there is no maturity benefit. The policyholder can renew the policy for another term, but no maturity benefit is paid.

As mentioned earlier term insurance plans are most basic and affordable form of insurance that provides extensive risk protection at the lowest possible premiums. However, there is no maturity benefit associated with the policies. Users with a well-versed investment portfolio should avoid purchasing life insurance plans with an investment component. Instead, they should preferably invest in a term insurance plan that provides extensive protection.

Personal Accidental Coverage

Very often individuals purchase life or term insurance plans, but do not go for personal accidental coverage that is offered as a rider. The primary benefit of purchasing personal accidental coverage along with term insurance plan is that it enhances the coverage at the same premium and helps in saving a considerable amount of capital.

As the name suggests personal accidental coverage helps in protecting the insured by providing coverage in case of accidental injuries and demise. Furthermore, it saves the insured from financial burden due to their temporary/permanent disability to work after the accident. Personal accidental coverage is not available as a plan but in the form of an auxiliary add-on rider along with the motor, insurance, health insurance, and life insurance plans.

Health Insurance

In the case of health insurance plans, insurance seekers can add personal accidental coverage for all the family members. Some of the insurance providers offer coverage up to AED 100000. Health insurance policies along with personal accidental coverage cover all types of deaths due to accidents. This add on rider also provides world-wide coverage therefore, the users are safe even if they are traveling out of their native country.

Life Insurance

In case of life insurance plans, the personal accidental coverage is offered as an add on rider that can easily be purchased at the time of signing up for the policy. The rider provides protection against all types of accidents. The maximum value of the sum assured available with personal accidental coverage as rider in case of life insurance varies from AED 100000-500000.

Motor Insurance

In the case of health insurance plans, the personal accidental coverage rider is available and is usually present as an inbuilt feature of the basic plan. This safeguards the driver against any strokes of uncertainties that may lead to an accident. Personal accidental coverage is available not just with four-wheelers but also with two-wheeler vehicles.

Difference Between Term Insurance and Personal Accidental Coverage

As we have a clear understanding of both term insurance plans and accidental coverage, the major differences between both are as follows-

Features and Benefits

In the case of term insurance plans, the nominee of the insured is provided a death benefit if the policyholder is deceased within the policy term. The death benefit in the form of sum assured will be paid regardless of the reason for death. Contrary to this in case of personal accidental coverage, the death benefit and coverage are only provided if the policyholder has met an accident resulting in injury, hospitalization, disability, or death.

Premiums

In the case of term insurance plans, customers have to pay a low-cost premium as these plans are considered as the most affordable insurance products. The cost of premium typically increases with an increase in age. On the other hand, in case of personal accidental coverage, the payable premium is dependent on the occupation of the insured instead of their age. For instance, if the policyholder applying for personal accidental coverage works in construction, mines, electricians then the company will categorize the profession into a high-risk bracket and will charge a higher premium.

In a Nutshell

In order to safeguard and protect your family against the strokes of uncertainties on the trail of life, it is vital to choose the right coverage, right plan along with the right add-on riders. Before purchasing any plan it is crucial to compare it with other options online to make sure that you get the best deal. Individuals looking forward to protecting their families can undoubtedly go for term insurance or a life insurance plan with personal accidental coverage to ensure maximum protection.

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