Wednesday, April 10, 2024

 Is there a Difference Between Health Insurance & Personal Accident Insurance?


Any insurance policy is based on an agreement between the insurance provider and the policyholder to guarantee compensation for the latter’s expenses during a crisis. Both health insurance and personal accident policies do the same. However, they provide medical cover for entirely different scenarios that may leave the policyholder casting around for help.

Most beginners opting for an insurance policy have little to no idea about the plans. But blindly purchasing one of them for the sake of receiving financial coverage during need is an impractical resort. Evaluating the difference between two significant plans like health insurance and personal accident insurance is crucial to eliminate this complication.

The Difference Between Health Insurance & Personal Accident Insurance


A health insurance policy is a form of insurance covering the policyholder’s medical expenses in case of accidents and chronic illness. Hospitalization costs, doctor consultation fees, and cost of medicines are all borne by the insurance provider. These are generally full-fledged insurance policies.

Personal Accident Insurance is a form of insurance covering the policyholder in case of disability or death caused by accident. In case of an accidental injury, the insurance provider will manage the cover. Also, personal accident insurance is an add-on cover.


Health insurance plans require a base policy premium until the specified tenure. No additional amount is required to be paid.

Personal Accidental Insurance plans require additional premiums for policyholders who wish to purchase this add-on cover.

Tax Benefits

Section 80D of the Income Tax Act authorizes the deduction of premium paid for the health insurance from the taxable income. The policy allows an upper limit of Rs.25,000 that can be extended to Rs.50,000. So, the health insurance policy allows the policyholders to enjoy a deductible income of Rs.75,000. In rare scenarios where both the proposer and their parents are above 60, the deductible income amount can be as much as Rs. 1,00,000.

Personal Accidental Insurance plans do not offer any such tax benefits.


Health insurance plans offer widespread cover against pre-existing illness, critical illness, and collision. The policyholder can receive the cover after the waiting period is over. They can also purchase a critical illness cover as an add-on.

Personal Accidental Insurance provides no cover against pre-existing illness and critical illness as it only covers during an accident. Full coverage against collision is available, though.

Type of Plans

Health Insurance policies provide a host of plans, mainly family-floater, group, and individual health insurance. Mediclaim, senior citizen cover, and unit-linked health plans are a primary part of it.

The policyholder can purchase Personal accidental insurance using a motor and health insurance plan.

Sum Insured

Health insurance plans may range from Rs.5 lakh to Rs.50 lakh. They may also go beyond this limit depending upon the chosen plan.

Personal accidental insurance may range from Rs.2.5 lakh to 1 Crore depending upon the sum insured amount that the policyholder has chosen.

The Bottom Line

The policyholder is expected to choose from these insurance policies depending on their preference, requirement, and budget. Consulting an insurance provider or research online before purchasing a specific policy is highly recommended.