While exploring insurance coverage options for financial security, “accident insurance vs health insurance” is a common and essential consideration.
While both health insurance and personal accident insurance cover unexpected expenses that relate to health issues, they serve different purposes and provide distinguished benefits.
Here is a blog that discusses the difference between health insurance and accident insurance to help you make well-informed decisions about which one or both suit your circumstances and requirements.
Before we explore health insurance vs accident insurance based on their coverage features and benefits, let us understand what each of these types of insurance plans means.
What is Health Insurance?
Health insurance is a type of insurance plan that covers medical expenses incurred due to injuries, illnesses or diseases. It is a comprehensive policy that can help pay for hospitalisation bills, pre-and post-hospitalisation expenses, daycare procedures, surgery costs and more.
In addition, health insurance plans are customised for individuals, families and senior citizens, offering specialised coverage features and benefits.
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What is Health Insurance?
What is Personal Accident Insurance?
Personal accident insurance is a type of insurance plan that covers medical expenses and offers financial compensation for accidental death or permanent total or partial disability.
The financial compensation is offered to help the policyholder sustain their livelihood due to their inability to work due to the accident. In the event of accidental death, the entire sum insured is provided to the nominee to reduce their financial burden.
Having explored accident insurance vs medical insurance basically, let us delve into their distinct features and benefits.
Personal Accident Insurance vs Health Insurance
Differentiating Factors |
Health Insurance |
Personal Accident Insurance |
Purpose | To offer a wide range of medical expenses arising due to minor or major illnesses, diseases, or accidental injuries. | To offer financial compensation as a replacement for loss of income due to accidental death or disability and cover accident-related medical expenses |
Types | Individual Health Insurance Family Floater Health Insurance Senior Citizen Health Insurance
| Can be purchased as a stand-alone policy or with health insurance or motor insurance plans |
Scope of Coverage | Broad scope of coverage Medical expenses for listed illnesses Hospitalisation Pre-and post-hospitalisation Day Care procedures Surgeries Preventive care, such as health check-up
| Narrow scope of coverage Accidental Death Accidental Permanent Total Disability Accidental Permanent Partial Disability Accident-related medical expenses
|
Death Benefit | No death benefit is provided to families for death due to an illness or injury. | Death benefit offered to the nominee in case of accidental death |
Disability Benefit | Offers coverage for medical expenses arising from the treatment of accidental disabilities. However, no exclusive financial compensation is offered for accidental disabilities. | Offers 200% of the base sum insured for the following permanent total disabilities: Loss of sight in both eyes Loss of use or physical separation of both feet and hands or one foot and one hand Loss of sight of one eye and loss of use or physical separation of hand or foot An injury that led to permanent disablement and subsequent loss of income
Offers a certain percentage of the base sum insured for permanent partial disabilities based on the type of disability and the terms and conditions mentioned in the policy documentOffers a certain percentage of the sum insured as follows: Permanent disablement - 100% Loss of two limbs or two eyes - 100% Loss of one limb and one eye - 100% Loss of one limb and one eye - 100% Loss of one limb or one eye - 50%
|
Coverage for pre-existing illnesses | Yes, after a waiting period | Not applicable |
Premium | Comparatively higher | Comparatively lower |
Types of claims | Reimbursement and Cashless claims | Defined payouts. Reimbursement applicable to medical expenses |
Additional Benefits | Wide range of add-on covers applicable | Limited options |
Tax Benefits | Yes, applicable under Section 80D of the Income Tax Act 1961 | No, applicable only on the base plan if it is health insurance |
Why Both Types of Insurance Coverage Might be Necessary?
While choosing a health insurance plan provides financial protection against a wide range of medical expenses, it may not be sufficient to manage the financial strain caused by accidental death or disability. In such cases, personal accident insurance becomes imperative, offering customised coverage to replace the loss of income and address the gaps left by health insurance plans.
For instance, if you meet with an accident while driving your car, leading to a medical emergency, your health insurance plan will cover medical expenses to treat your emergency. However, if the accident leads to a permanent total or partial disability, you will not receive additional support if you don’t have personal accident insurance coverage.
How to Make the Right Choice?
Ideally, opting for both health insurance and personal accident insurance provides extensive and comprehensive protection, ensuring coverage for a wide range of accidental and medical expenses.
However, choosing between the two options or getting both the coverage benefits should depend on your lifestyle, profession, needs and financial condition.
Here are a few factors that you can consider:
Potential Risks
Assess your occupational and routine activities to identify potential risks. For example, if you drive through accident-prone zones almost every day or work in a high-risk workspace, a health insurance plan with personal accident coverage is a must.
Determine your Financial Situation
If you have multiple insurance coverage plans, examine the extent of coverage and determine if it will be sufficient to manage unprecedented events, including accidents, considering your family’s future. If you don’t have adequate coverage, choosing both health insurance and personal accident insurance is highly recommended.
Compare Policies
Explore different options and compare their coverage features and benefits to choose a suitable policy based on your requirements and affordability. In addition, the reliability of the insurance provider should be considered to ensure adequate coverage with excellent claim settlement and support services.
Wrapping Up
Understanding and exploring medical insurance vs accident insurance is essential for ensuring comprehensive financial protection for you and your family. While a health insurance policy offers extensive coverage for a wide range of medical expenses, personal accident insurance extends the financial coverage exclusively for accidental death and disability. By analysing your potential risks and insurance coverage needs, you can determine a suitable policy for your medical expenses and financial requirements.
At Reliance General Insurance, we offer various customisable
health insurance plans and
personal accident insurance plans tailored to suit individual financial needs. You can explore the different options and choose the best coverage that caters to your lifestyle and medical expenses.
With our
health insurance calculator, you can calculate the applicable premium for the different options to make wise and well-informed financial decisions.
Frequently Asked Questions
Is personal accident coverage mandatory?
Personal accident coverage is not mandatory. However, it is highly recommended because, in addition to covering medical expenses, it offers financial assistance to maintain the standard of living with your family due to loss of income in the event of accidental death and disability.
Is personal accident insurance necessary if I already have a health insurance plan?
Personal accident insurance is highly recommended even if you have a health insurance policy because it offers specific financial support for accidents that a health insurance plan may not fully cover, such as the lump sum payout benefit for accidental death and disability.
Who should buy a personal accident insurance policy?
People engaging in high-risk occupations, such as factory workers, mechanical engineers, construction workers, miners, journalists, and drivers, should consider buying personal accident insurance. In addition, individuals driving in accident-prone zones frequently should ensure adequate financial coverage with a personal accident insurance plan.