Insurance is an important instrument of protection invoked for future financial coverage, whether it is for life or health. The basic difference between the two is that while life insurance is a protection for the vagaries of life where the payout is effected on the demise of the insured, while health insurance comes within the ambit of general insurance which protects you from emergency medical expenses incurred for hospitalization.
The question is if the accident cover is provided in them? In the case of life insurance the cover is extended to death regardless of the circumstances excluding suicide. In the case of health insurance, though accidental injuries requiring hospitalization cannot be described as the illness, there are indeed health insurance plans that provide for accident cover.
Types of Insurance:
Life insurance is a protection for your family or the next of kin in the event of unfortunate demise during the currency of the policy. The insurance provider pays a lump-sum amount in the event of death to the nominee, which basically is the sum assured. On survival, the accumulated premium along with additions in the form of bonus is paid to the insured as per terms of the policy. In the case of health insurance, the plan caters to medical expenses incurred during hospital treatment to the extent of the sum insured. Generally life insurance policies have long terms, while health insurance plans mostly have annual terms.
Accident Cover in Health Insurance:
Accidents are the most uncertain events in your life. It can happen at any time and may lead to hospitalization for treatment of grave injuries that will surely lead to strain on the family finances which can potentially escalate to a crisis. Though it does not come in the typical definition of an illness, the fact remains that you remain incapacitated for a prolonged period affecting the life of your family adversely.
Most insurance providers have thus designed health insurance plans that cater specifically to accidents. These plans not only cover for the medical expenses in the hospital, but also extend other benefits to cover for the convalescence. Now comes the important question about the difference in Accident Insurance plan and the Health Insurance plan.
Difference between Accident Insurance Plan and Health Insurance Plan:
The first thing to understand is that they are no substitute for each other. Just because you have an Accident Insurance Plan, it does not mean that you can abandon the Health Insurance plan altogether. While the former is accident specific, the latter covers for a horde of illnesses including critical ones regardless of age constraints. To understand the various complexities involved, it is prudent to gain further insight into each one of them so that you can equip sufficiently, in the long run, to arrive at informed decisions.
Accident Insurance Plan:
The uncertainty factor related to accidents and its overall impact not only on the insured, but his dependents are important considerations for framing the parameters of this plan. The key features of this plan can be tabulated thus:
- Coverage: Since it is accident specific, all injuries and wounds arising out of the accident are covered for medical and hospital expenses. Needless to say, it precludes the possibility of planned hospitalization.
- Payout: The nature and severity of the impact of the accident make payment of tax-free payment of a lump-sum sum amount to cater for medical expenses and subsequent recovery till the insured is capable of returning to normal life. In other words, rehabilitation is intrinsic to this insurance plan.
- Temporary Disability: In the event that the insured is temporarily disabled and is confined to the residence, the plan provides for payment of weekly compensation so that life can be sustained.
- Permanent Disability: In such an event the insured is paid the sum assured to compensate for the inability to earn a decent livelihood.
- Death: In the unfortunate event of accidental death, the nominee is paid a lump-sum amount as defined in the policy terms.
- Process: While the purchase of this plan is easy without checks, the payment requires elaborate documentation.
Health Insurance Plan:
A Health Insurance Plan is general protection for medical expenses when afflicted by a horde of diseases, including critical and other lifestyle ones. The key features of health insurance plans are:
- Payment: The popular mode of payment is directly through the cashless facility. In its absence, reimbursement of expenses incurred is also permitted.
- Daycare: Certain treatments are now possible without an overnight stay in a hospital and such expenses come under the ambit of insurance,
- Pre and Post Hospitalization expenses: All health insurance plans allow payment of expenses outside the hospital stay for specified periods defined in the plan terms.’
- Pre-existing Diseases: Defined pre-existing diseases are covered after a waiting period which varies according to plans offered by different insurers.
- Variants: Health insurance offers a range of variant plans which cater to specific covers, the popular among them being:
- Maternity
- Critical Illness
- Cancer and Heart care
- Family Floater
- Senior Citizen
- Top-up and Super Top-up
- Ambulance: Most plans allow for payment of ambulance expenses incurred for travel to and from the hospital.
- Sub-Limits and Co-pay: While there are sweeping covers for all eventualities, some plans restrict the allowance of cover by insertion of limit clauses which you need to factor in before purchase. Some of the key areas it impacts are:
- Bed Charges
- Deductibles
- Co-pay
- Disease-specific exclusion
Choice of an ideal Insurance plan:
The choice of an accident, health, or travel insurance plan is vital for it may land you in a situation that is far from hassle-free.
- The settlement process should be seamless with a well-appointed TPA looking after the process efficiently.
- A robust PPN (Preferred Partner Network) of hospitals which permits the benefit of reaching the facility fast, preferably in your locality.
- An insurance provider with a vibrant customer care service background.
Bottom Line:
If accident cover is available in Life and Health Insurance both, what is the utility of having a separate Accident Insurance? The answer lies in the fact that Accident Insurance provides a protective layer that is unique in its scope and range. It is embellished with features that are truly loaded for your well being when the chips are down in an accident.
