Safeguarding your family’s future is no small task. In India, the term “insurance” is tossed around quite a bit. However, most people are not aware of which insurance to choose. Life is indeed unpredictable. At times, you get really fortunate, while at other times, you may encounter unexpected challenges. To be able to protect yourself, it’s important that you differentiate between the two main protection options: Term Insurance and Personal Accident Insurance.
You can compare these to two different kinds of umbrellas. One is for a slight drizzle, and the other is for a gale. Every family should understand how these work.
What is Term Insurance?
Term insurance is merely a life insurance plan with no maturity benefit. The family of the insured is paid a large sum of money in the event of death. The family members can use this money to meet their daily needs, such as grocery shopping, children’s education, EMIs for the house, etc. It is called a “pure” cover because it does not pay any money in case of the survival of the insured person. This also makes it the most affordable option.
If you are searching for the best term plan in India, you will notice that paying only a small monthly premium can offer your family an enormous safety net. For example, a 30-year-old may have to pay only a few hundred rupees monthly to be covered for a crore rupees.
What is Personal Accident Insurance?
Life isn’t only about fate; it is also about the “what ifs.” What if an accident occurs and you are unable to work for some duration? This is where personal accident insurance helps.
In case of an accident, the insurance company will pay you money for your injury. Death is only one of the aspects it covers. Besides it, two other coverages are:
- Complete Disability: If a person goes blind or loses his/her limbs and thus cannot work anymore.
- Partial Disability: If an injury leads to a person’s working capacity being reduced.
- Medical Expenses: Some insurance plans cover medical expenses post-accident.
Why One is Not Enough
Perhaps you think, “But I have a term plan, so I am secure.” But it’s not always the case. What if you get involved in an accident and survive but can no longer work? A term plan will not give you any compensation in such a scenario. In fact, your family would need to rely on layoff funds and would not get your medical expenses as well as other daily living needs covered because of your absence in salary-earning capacity.
Meanwhile, personal accident cover only comes into play if you are involved in an accident. Therefore, if the person dies due to a heart attack or any illness, this policy won’t be a source of financial help. That is why the majority of experts say that a family is in dire need of both. They perform like a team.
How to Choose the Best Plans
Finding the best term plan in india depends on only a few simple things. “Claim Settlement Ratio” is what you should look at. It is simply a number that represents how many families the insurer has actually helped throughout the years. If the ratio is higher than 98%, it generally means that it is a reliable company/provides good service.
When selecting a personal accident insurance policy, you should not forget about “disability cover.” It is wise to ensure that the policy provides benefits even for minor injuries that cause you to be absent from work for a short period of time/few weeks.
A Simple Guide for Every Indian Family
- Start with Term: If you are the breadwinner of the house, a term plan is a must for you. It guarantees your children’s education even in the absence of your presence.
- Add Accident Cover: The Indian roads are notorious for their traffic. Getting a standalone personal accident insurance plan provides a worry-free state of mind while commuting.
- Keep it Simple: Avoid buying plans that assure you to “double your money.” Such plans are highly priced and hardly provide assistance when you are in real need.
- Be Honest: When you are filling the form, always mention your accurate health and occupation details. This will lead to your family receiving the amount smoothly without any disputes in the future.
Practical Steps to Take Today
Have a discussion with your husband or wife/parents. Say these questions:
- “How much money does our family need every month to live happily?”
- “Do we have enough savings to pay off our loans?”
- “Who will pay the bills if I am hurt and can’t work for six months?”
Not having definite answers means you must find these two plans. You don’t have to be a genius in math to know them. Loving your dear ones is enough.
Basically, term insurance is for “after death,” whereas accident insurance is for “while alive.” Both are extremely affordable in India these days. Purchasing them will be the greatest gift for your family. It also tells them that irrespective of the circumstances, they will be fine always. A term plan is a shield for the family’s aspirations in case of your demise. Accident insurance is a backup for your finances in case of injury. Having both means you are prepared for anything.
