Life Insurance vs Accidental Insurance

There are fundamental differences between life insurance and accidental insurance. Knowing what they are can help you choose the right coverage for yourself.
life insurance
Know the difference between life insurance and accidental insurance. Image courtesy: Adobe Stock
HT Brand Studio Published: 19 Jan 2023, 10:00 pm IST
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In India, among the different types of personal insurance products that you can avail, life insurance and accidental insurance are two of the most common. Although there are a couple of features that overlap, both life, and accidental insurance are conceptually different from one another. Getting to know what these two insurance products are and how they differ from each other can make sure that you get the right kind of protection for yourself. Continue reading to find out more about them.

What is Life Insurance?

Life insurance is an agreement between two parties – an insurance provider and a purchaser, also known as the policyholder.

Here, the insurance provider promises to pay a certain sum of money, known as the death benefit, to the policyholder’s nominees in the event of the former’s death. In exchange, the policyholder is required to make periodic payments, termed as premiums, to the insurance provider. This death benefit would only be payable to the policyholder’s nominees if the former’s death occurs during the tenure of the life insurance policy.

On the other hand, if the policyholder survives till the end of the plan’s tenure, the insurance provider may or may not provide any maturity benefits depending on the type of life insurance policy opted for.

Although there are various kinds of life insurance policies available in India, term insurance, whole life insurance, and endowment policies are three of the most common types that individuals opt for.

What is Accidental Insurance?

In accidental insurance, the insurance provider agrees to pay a certain sum of money in the event of an accident involving the policyholder. In the case of the accidental death of the policyholder, the sum assured amount under the policy would be paid to the nominees. On the other hand, if the policyholder merely suffers total or partial disablement, the amount would be paid directly to them instead.

The amount that’s payable under an accidental insurance policy may vary depending on the extent of disability or death of the policyholder.

What are the Differences Between Life Insurance and Accidental Insurance?

There are quite a few differences between a life insurance policy and an accidental insurance plan ranging from the coverage to the premiums of the plans. Here’s a quick look at the different points of difference.

Cause of Death

The death benefit listed under an accidental insurance policy is paid out to the nominees only if the policyholder’s death arises out of an accident. Such plans tend to be very specific and are designed to provide coverage for only one cause of death.

On the other hand, the death benefit of a life insurance policy is paid out to the nominees irrespective of the cause of death of the policyholder as long as the death is not by suicide or wilful negligence. This effectively means that if the holder dies as a result of a medical condition, a natural cause, or even as a result of an accident, the life insurance benefits would become payable.

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Type of Coverage

The sum assured under a life insurance policy becomes payable only if the policyholder dies. If the policyholder survives or merely sustains injuries or disablement, no benefit would become payable.

In the case of an accidental insurance plan, the sum assured is not only paid out upon the death of the policyholder due to an accident but also if the policyholder suffers any kind of disability as a result. However, in the case of a disability, the extent of the payout may vary depending on whether it is permanent, temporary, partial, or total.


The premium that you’re required to pay for an accidental insurance policy is usually far lower than a life insurance plan. This is primarily due to its limited scope since the payout under such a plan is only made if the policyholder gets into an accident. Death or disability due to any other causes other than arising out of an accident aren’t covered, therefore the premiums are often very low.

Although life insurance policies are designed to offer payouts only in the event of the death of the policyholder, they tend to cover more causes of death. Due to the expansive nature of the coverage of a life insurance plan, the premiums that you would have to pay would also likely be higher than an accidental insurance policy.


Now that you’re aware of the differences between these two kinds of insurance policies, you should be in a better position to determine the kind of plan that you need. That said, before heading out to purchase an insurance plan for yourself, remember to compare multiple policies from different providers. Doing so will ensure that you get the best deal.

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