Accidental Death Cover vs. Term Insurance Plan

Term Insurance and Accidental Death Benefit can seem quite similar to each other because they provide sum assured to the nominee in case the life assured passes away. As similar as they seem, they both are very different from each other. Term insurance provides sum assured to the nominee in case the life assured passes away during the policy tenure, some term insurance plans also offer maturity benefit. On the other hand Accidental Death Cover provides sum assured along with rider benefit to the nominee in case the life assured passes away in an accident. Accidental Death Cover is a rider that can be purchased at the time of policy issuance.

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What is Term Insurance?

Term Insurance plans are a type of life insurance plans they are also called ‘Pure Protection Plan’. Usually these types of policy offer the sum assured to the family members in an event of sudden demise of the policyholder during the tenure of policy, basically term insurance deals with covering the risk of untimely death of a policyholder. Term insurance plans offer you high insurance coverage with a minimum premium amount giving you the opportunity to create a safe and secured future for your family member in your absence.

What is Accidental Death Benefit? 

Under accidental death benefit rider sum assured along with rider benefit is payable to the nominee/beneficiary in case of accidental demise of life assured. In many cases, accidents might not lead to the on the spot death of a life assured, the insurance companies provide a duration after the accident occurs to provide the given cover. For example if the life assured passes away within 120-180 days when the accident occurs the nominee/beneficiary will be provided with a sum assured amount. 

Accidental Death Cover vs. Term Insurance Plan

The difference between accidental death cover and term insurance is that term insurance is a type of life insurance on the other hand accidental death cover is a rider that can be purchased along with any type of life insurance plan. 

Term insurance promises to provide sum assured to the nominee, in case of an unfortunate demise of life assured during the policy term. Accidental death cover provides sum assured along the rider benefit to the nominee in case the life assured passes away in an accident. 

The major difference between the two is that term insurance provides the death benefit in case the life assured passes away during the policy term, but accidental death cover only provides death benefit if the life assured passes away in an accident. The rider benefit under the accidental death cover can be equivalent to the sum assured amount. 

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Conclusion

Accidental death cover is a rider that can be purchased with the life insurance policy. Term insurance is a type of life insurance and accidental death cover can be purchased with the term insurance plan. Accidental death cover provides death benefit only if the life assured passes away in an accident.