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Difference Between Health Insurance and Personal Accident Insurance

Team AckoJan 24, 2025

Life is unpredictable, and you never know when a medical emergency will knock on your door. By paying a health insurance premium, you safeguard yourself against heavy monetary strain in case of an unfortunate event. You or your loved ones might fall victim to a critical illness or get involved in a nasty accident.

Health insurance plans are comprehensive, protecting you against critical illness as well as accidents. But what if you get involved in a serious accident that leads to severe medical expenses? In that case, having a personal accident cover is a blessing in disguise.

A personal accident cover means you get benefits under a specific situation of an injury, while a health insurance policy provides all-around coverage. A lot of people are wondering whether they should invest in both types of insurance policies. Let's understand the difference between health insurance and personal accident insurance in detail to help you make an informed decision.

Difference

Contents

An Overview of Health Insurance
An Overview of Personal Accident Insurance
Health vs Personal Accident Insurance:
- Conclusion
Frequently Asked Questions
Building a Resilient Future: The Power of Health and Life Insurance

An Overview of Health Insurance

The expenses associated with healthcare, such as medications, therapies, procedures, and more, continue to rise annually. This can pose challenges for the general public in managing their health issues, and even more so in times of medical emergencies.

Health insurance presents a viable solution to remain financially equipped to tackle unexpected health-related circumstances. Policyholders need to make a monthly medical insurance premium payment to the insurer. In return, the insurance company undertakes to cover a portion of the medical costs incurred up to a specified limit.

Various health insurance plans are available in India, each offering unique benefits and features. For instance, you can invest in a critical illness policy covering cancer and other diseases. When selecting a health insurance policy, it is essential to assess one's specific requirements and situation.

An Overview of Personal Accident Insurance

Accidents are commonly linked with automobiles or risky circumstances. Consequently, one could suffer severe harm to the physical body or even worse. In the event of a serious accident, hospitalisation may be necessary to address the injuries and recover. If it leads to death, it could result in sorrow and mourning for the family.

One aspect that may be overlooked is that the family might also encounter financial difficulties following a death, particularly if the individual who passed away was the primary breadwinner. If you are concerned about such possibilities, particularly if you are employed in high-risk environments, you may want to explore obtaining personal accident insurance.

If you possess a vehicle, there is a chance that you already have personal accident coverage as part of your auto policy. A mandatory personal accident coverage is included in an auto insurance package if you do not already have an existing personal accident plan.

You can also buy the best accident insurance without owning an automobile. This type of policy will cover hospital bills related to recovering from the injuries. These plans also offer disability benefits to individuals.

One of the major features of this type of insurance is the accidental death benefit. If the insured person dies, the beneficiaries receive the complete sum assured.

Health vs Personal Accident Insurance:

A health insurance policy, can provide an umbrella of coverage to the policyholder as well as the family members. While a personal accident policy is useful only for the policyholder when bought with a motor insurance policy or as a separate plan.

Here is a table that shows the differences between Health Insurance and Personal Accident Insurance:

Sr. No	Parameter	Health Insurance	Personal Accident Insurance
1	General Meaning	Health insurance provides coverage for medical expenses in various situations.	Personal Accident Insurance provides coverage for injuries specifically due to an accident.
2	What is the nature of the plan?	A full-fledged health insurance policy.	An add-on cover.
3	Is an additional premium required?	No, the premium is required only for the base policy.	Yes, an additional premium is required to buy this add-on.
4	Option to buy Add-ons	Yes	No
5	Tax benefit	Yes	No (only on the base plan)
6	Coverage for Pre-existing diseases	Yes, after a waiting period	No
7	Maternity Benefits	Yes, it can be bought as an add-on	No
8	Coverage for Critical Illness	Yes, it can be bought as an add-on	No
9	Coverage against collisions	Full coverage	According to personal accident insurance meaning, you only get covered for hospitalisation charges.
10	Types of plans	Group, family health plan, individual health insurance, etc.	Personal accident covers can be bought with Motor and Health insurance plans
11	Sum insured	Your health insurance cost can range between Rs. 5 to 50 Lakh or beyond, depending upon the type of plan chosen.	A death insurance policy can range between Rs. 2.5 Lakh to 1 crore depending upon the sum insured chosen
12	Waiting period	9 months to 4 years	Not applicable

Conclusion

Health and personal accident insurance provide financial help during a medical emergency. One does not have to use saved money or take loans to pay hospital bills if they proactively buy health insurance as any medical emergency is unpredictable be it a health issue or an accident. Buying a personal accident cover with a base health insurance policy will extend the coverage to include the full cost of medical treatment against accidental damage. For example, accidentally falling from a great height, drowning, etc.

Frequently Asked Questions

These are some commonly asked questions about health insurance and personal accident cover:

What is the major difference between health insurance and personal accident insurance?

A health insurance policy provides multiple coverages related to a medical emergency for various situations. Whereas a personal accident insurance plan is an add-on that one can buy with a health or motor insurance policy. This is the one major difference between health insurance and personal accident cover.

What is personal accident insurance?

Personal accident insurance provides financial aid or insurance if a person meets with an accident. Under motor insurance, on-road accidents are covered and under health insurance multiple situations that result in injury, disability or death are covered.

Is a personal accident covered under health insurance?

No, one needs to either buy a separate personal accident insurance policy or buy it under health insurance as an add-on. Cost of hospitalization is covered under health insurance though. As far as motor insurance is concerned, buying a personal accident add-on for on-road injuries is mandatory by law.

Is it necessary to buy separate personal accident insurance?

Yes and no both. Buying a personal accident cover under motor insurance is mandatory. However, it is your personal choice to buy a personal accident cover with a health insurance policy.

Can I buy health insurance and personal accident insurance from the same company?

Yes, you can if available with the insurance company.

Which insurance is better at health insurance vs personal accident insurance?

Health insurance provides wider coverage as compared to personal accident insurance. This means more number of claimable events are included under health insurance whereas only accidental injuries are covered under a personal accident insurance plan.

How to find the best personal accident insurance policy?

The best personal accident policy is the one that is the most suitable for your needs. Look for plans that offer complete coverage at the time of need. The insurance company also matters when it comes to claims. Look for an insurer that will help you out without much hassle.

How much does a health insurance policy cost?

The cost of a health insurance policy depends upon the coverage you are looking to purchase. The sum insured of the policy also plays a major role in determining the premium.

Which are the major health insurance schemes in India?

Ayushman Bharat Yojana is one of the biggest health insurance schemes in India. It provides coverage for low-income groups that fall below the poverty line of the country.

Which benefits does personal accident insurance provide?

Personal accident insurance provides financial aid in case of accidental injury, disability, or death.

Is it a good idea to buy health insurance online?

Yes, buying health insurance online is a good idea because one can save time, make a purchase from anywhere with an active internet network, and probably get the policy online.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

Building a Resilient Future: The Power of Health and Life Insurance

Health insurance protects against the escalating costs of medicine and ensures good treatment in the case of an emergency. Still, health insurance cannot financially secure your family in the long run. For that, securing a term insurance plan is the key. For example, a term insurance plan for 1 crore will give you an affordable way of securing your family's financial well-being in your absence, thereby paying for the loans, education, and day-to-day needs.

A life insurance policy will help you tackle multiple life-stage goals in broad financial planning. With a life insurance calculator, you can determine the premium to be paid and opt for a plan suited to your financial condition and future goals.

Together, health and life insurance will form a balanced financial strategy, ensuring immediate and long-term security for your family. Don't wait, take the step today to build a resilient financial foundation.