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Introduction to Insurance

Given how unpredictable life can be, at every turn, having comprehensive financial safety nets for every such situation is vital for you and your family's well-being. This is precisely where insurance comes in – life, health, accident, or general insurance policies. Let us now delve further into two forms of insurance – health insurance vs personal accident insurance.

What is Health Insurance?

When you purchase health insurance, your payment accounts for buying a premium that covers costs of medical, surgical, and prescription drug-related expenses you may incur. This form of insurance comes in handy when you are injured or ill and can help negate the enormous medical costs you will otherwise have to dole out from your pocket.

What is Personal Accident Insurance?

When you purchase personal accident insurance, you are paying a premium that will provide coverage against unanticipated accidents that may cause you bodily harm – be it injuries, partial or complete disability, or accidental death. In addition, this form of insurance tends to cover your hospitalisation costs (both pre and post). In some instances, it will also offer daily cash remittances (for up to 30 days), depending on the insurer in question. When decisions have to be made pertaining to personal accident insurance vs health insurance, it is beneficial to secure both, to avoid the uncertainty that life may throw up.

Features of Health Insurance

  • Sub-limit

When you are hospitalised, a range of charges are levied on you, including room rent, surgery and doctor fees, and fees for medication and equipment. A sub-limit implies that there will be a separate reimbursement clause for each of these factors.

  • Lifetime Renewability

When it comes to health insurance, the premium paid is directly correlated to your age and gets tougher to secure at a more advanced age. As per the revised guidelines of the IRDA, health insurance providers now have to offer lifetime renewability.

  • Worldwide coverage

With a massive evolution in the quality of health insurance plans, you can also opt for international plans if you wish to avail of better healthcare services abroad.

  • Daycare & OPD charges

Earlier, insurers required you to be hospitalised for at least 24 hours before processing your health insurance claim. Under the revised guidelines, procedures that last a few hours, such as chemotherapy, dialysis, eye surgery, etc., can also be claimed, with certain insurers even offering to cover specific dental procedures.

  • No medical tests up to the age of 45

To ease the process of securing health insurance, insurers do not require you to undergo medical tests for the policy if you are below the age of 45. However, you must ensure complete transparency while filling out the form, failing which you will be penalised, with a possibility of your health insurance policy being suspended.

Features of Personal Accident Insurance

  • Minimal documentation

One of the most significant plus points of personal accident insurance is that there is very minimal paperwork to fill out. After providing your basic details and the requisite proof, the insurer will process your insurance papers.

  • Easy claim process

When viewing personal accident insurance vs medical insurance, in the case of the former, the claim process is straightforward and often super quick, with insurers doling out the insured amount at warp speed, beneficial for you and your family members.

  • No medical tests

When buying such a policy, no prerequisite medical test is needed. Once you fill out your basic details, the insurer will verify the details and process your papers.

  • Worldwide coverage

In the case of personal accident insurance, you can make a claim irrespective of whichever country in the world you are in, often at a nominal or zero cost to your insurance policy.

  • Ambulance expenses

Given the nature of this form of insurance, it also accounts for the costs incurred in transporting you from the accident spot to the hospital.

Health Insurance vs Personal Accident Insurance

Let us now take a macro view of Health Insurance vs Personal Accident Insurance:

Parameters

Health Insurance

Personal Accident Insurance

Nature of plan

Complete cover

Add-on covers

Additional premium

No

Yes

Options to buy add-on

Yes

No

Tax benefits

Yes

No

Waiting period

9 months – 4 years

None

Sum insured

Rs. 5 Lakhs – Rs. 50 Lakhs (or beyond)

Rs. 2.5 Lakhs – Rs. 1 Crore

When to Buy Health Insurance?

The right age to buy a health insurance policy is when you are in your mid-twenties or early thirties. This is because the premium at this age is considerably cheaper, in addition to the waiting period being shorter, no requirements for medical tests, income tax exemptions, and greater cumulative bonuses.

When to Buy Personal Accident Insurance?

When making a choice vis-a-vis personal accident insurance vs medical insurance, it would help if you bought personal accident insurance as soon as you start earning, irrespective of your age, profession, and health status – with the premium being decided based on your profession rather than your age.

In a Nutshell

When tasked with choosing between Health Insurance and Personal Accident Insurance, the former must always be secured first. Life can be uncertain, as recent times have proven, and in such cases, having a comprehensive Health Insurance in place can help secure yourself and your family from financial troubles.

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FAQs on Health Insurance VS Personal Accident

  • ✔️What is the eligible age for Health Insurance?

    For Adults, 18-65 years of age and for children, 90 days-18 years.

  • ✔️Am I allowed more than 1 Health Insurance?

    Yes, you are allowed to take out multiple health insurance to get better coverage.

  • ✔️Is Health Insurance eligible for tax benefits?

    Yes, under Section 80D of the Income Tax Act, 1961.

  • ✔️What is the maximum Personal Accident Insurance compensation?

     The compensation is 125% of the sum insured.

  • ✔️What expenses can be claimed under Personal Accident Insurance?

    Medical expenses due to accidents, transportation costs, compensation for income foregone, and children's education fund.