How Term Insurance Is Different from Accidental Insurance?

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Buying the right insurance plan is critical for getting the required coverage at the given time. Insurance helps you financially protect yourself and your loved ones against unpredictable and unfortunate events. 

But how do you know which insurance plan will serve your purpose? Should it be the one with the maturity or lifetime benefits? If you are confused about whether to invest in a term or an accident insurance plan, let us give you a sound understanding of both of them. 

Here, we will talk about how buying either of them or both at the same time can help you get the required financial cover. 

What is Term Insurance?

Term insurance is a form of life insurance that offers financial coverage for the beneficiaries in case of the policyholder’s demise. The best part about term insurance is that it comes with a low premium benefit. The reason behind this is that it comes with only death benefits and no maturity benefits. However, certain insurance providers offer payback plans in term insurance. In the payback plan, the insurer gets a portion of their premiums paid back in case they survive by the end of the policy term. 

Another good thing about term insurance plans is that they come with flexible payment options for the policyholders. The policyholders can pay their premiums monthly, quarterly or yearly, depending upon their financial preferences.

What is Personal Accident Insurance?

Personal accident insurance is a type of insurance that provides coverage against an unfortunate event of a policyholder’s disability or demise due to an accident. The insurance plan helps policyholders meet their financial requirements even if they suffer from a permanent, partial or total disability leading to unemployment and loss of income.

Personal accident insurance offers a sum assured to the beneficiaries in the event of the policyholder’s demise. On the other hand, in the case of disability, the same amount is provided to the policyholders to help manage their finances.

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Difference between Term & Personal Accident Insurance in UAE

Now that you know both term life insurance and personal accident insurance offers a death benefit, here is what sets them apart. 

  • Cause of Death - Term insurance covers the policyholder’s death caused by an accident or a natural cause. On the other hand, personal accident insurance covers only the death caused by an accident.
  • Coverage - Term insurance offers coverage only against the policyholder’s death. On the other hand, personal accident insurance offers coverage against medical expenses and disabilities caused due to an accident. 
  • Sum Assured- The insurance company provides the sum assured to the policyholder with personal accident insurance in case of permanent or total disability. The policyholders can use this amount and manage to maintain their lifestyle if they are unemployed due to a disability. On the other hand, with term insurance, the insurer provides a sum assured to the beneficiary only in the case of the policyholder’s demise. 

Term Insurance or Personal Accident Insurance - Which One to Buy?

Both term and personal accident insurance have their own benefits. The type of insurance you need depends upon your priorities. Make sure you analyse your financial needs before choosing an insurance plan. 

If you are looking for coverage for yourself against unexpecd medical emergencies and more, you must choose to buy personal accident insurance. However, if you are looking for coverage to provide financial support to your family in case you are no longer available to fulfill their needs, you must decide to buy a term insurance plan

You can also combine term plans in the UAE with personal accident insurance for better coverage. The cost of such insurance plans is reasonable, especially for individuals employed in high-class professions. But before you buy an insurance plan, you must first know the amount of coverage you need. To find out the amount, you can use online term life insurance calculators and figure out the amount of insurance coverage required. 

The premium depends upon various factors such as policyholder’s age, location, monthly income, budget requirements, lifestyle, marital status, profession and more. Make sure you consider buying an insurance policy at an early age as insurance prices are lower for youngsters. 

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The Bottom Line

Now that you know the difference between term and personal accident insurance plans, you will be able to make the right choice. If you need to know more about the features and benefits of these insurance plans, you can visit our website, go to the relevant section and find the best insurance plans based on your preferences. 

You can also call our help and support team. Our experts will analyse your requirements and will help you find the best-fit insurance plan according to your needs.

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