Critical Illness Term Insurance and Accidental Disability Policy: A Comparison!


A regular term insurance policy can’t provide additional benefits
except a death benefit. In this regard, a Critical Illness Policy or Accidental Disability Policy comes in handy to cover hospitalisation expenses.

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Critical Illness Term Insurance & Accidental Disability Cover: An Overview

Critical Illness Term Insurances and Accidental Disability Policies are efficient ways to avail the financial coverage that a basic term insurance fails to provide. However, there are some differences between critical illness term insurance and accidental disability policy. In this article, we are going to segment those differences based on certain aspects.

What is Critical Illness Term Insurance?

A Critical Illness Term Insurance is a kind of policy that provides financial coverage and covers the policyholders' medical expenses when they are suffering from dire and long-term health diseases such as cancer, renal failure, heart attack, and more. The policy offers a lump sum amount as expenses for the critical and expensive medical treatments during the insured's unfortunate situation.

Following are the standard features of Critical Illness Term Insurance:

  • Lump-Sum Payment
  • Income Replacement
  • Waiting Period
  • Effortless Claim Process
  • Diverse Coverage

What is Accidental Disability Policy?

The Accidental Disability Policy offers financial coverage and acts as a source of earning substitute during unfortunate circumstances. Accidental disabilities are widespread and inevitable possibilities in modern existence. These circumstances can eventually lead to financial loss, and other family members need special assistance during these situations. Insurance companies offer Accidental Disability Policy as a rider facility with the term or life insurance policy.

However, the policy-seekers must take some basic features of Accidental Disability Policies into consideration before purchasing an Accidental Disability Policy are mentioned below:

  • Provides income protection during the accidental disability of the insured
  • Available through both public and private programs
  • Additional purchasing options
  • Premium Return Rate
  • Policy Renewal Benefit
  • Non-Cancellable

These features will portray the policy as a beneficial one to those who have uncertainty in their daily lives.

Critical Illness Insurance vs. Accidental Disability Insurance

With the diverse range of policies available in the Indian insurance market, it can get tricky and exhausting for the policy-seekers to choose the suitable one. This section will be mentioning the fundamental differences between a Critical Illness Term Insurance and an Accidental Disability Policy and the situations that you must consider before purchasing either of the policies. 

  1. Nature of the Policy

    Critical Illness Term Insurance is very different from basic term insurance or an Accidental Disability Policy. Under basic term insurance, only death benefits are offered to the beneficiary, where no hospitalisation or treatment expense is covered. However, under a Critical Illness Term Insurance Plan, a lump sum amount is provided as soon as the insured person is diagnosed with a critical illness. The lump-sum amount is generally the sum assured under the policy, which one can use to treat the disease or can use it as an income replacement. 

    A Critical Illness Term Insurance Plan is a stable plan that provides pre-determined payouts. 

    On the other hand, Accidental Disability Policy is a policy that will provide financial coverage in case of accidental disability leading to loss of income. The policy can act as an income replacement and financial substitute for regular financial needs during accidental and adverse conditions. Due to an unwanted disability, there are many situations where the family suffers from financial limitations because of the insured's loss of job.

    However, the sum assured promised by Accidental Disability Policy is dependent on many variable factors such as the cost of disability, income amount to be replaced, policy tenure, and waiting period of the policy.

  2. Coverage Offered

    Before purchasing a Critical Illness Insurance Plan, it is essential to get an inclusive insight into the expenses covered under the plan and what kind of diseases are included in the plan. 

    The acute diseases that are covered under the Critical Illness Term Insurance Plan are:

    • Heart Attack
    • Multiple Sclerosis
    • Stroke
    • Cancer
    • Coronary Artery Bypass Surgery
    • Heart Valve Replacement
    • Major Organ Transplantation
    • Primary Pulmonary Arterial Hypertension
    • Paralysis
    • Kidney failure
    • Brain Tumor (Benign)
    • Aorta Graft Surgery
    • Parkinson's Disease
    • Alzheimer's Disease
    • Liver Disease End-Stage

    Accidental Disability Policy has coverage for both long-term disability and short-term disability. The insurer will pay a particular part of the assured amount depending upon the degree of disability. For short-term disability, the insurer will also pay substitution charges for income loss weekly. This income replacement amount will only be provided for the specified amount period given during the purchase of the policy.

  3. Duration of Payment

    A Critical Illness Term Insurance Policy is an insurance that provides a lump-sum amount at one go on being diagnosed with any critical disease. The tenure parameters however, vary from basic term insurance or an Accidental Disability Policy. In this plan, the waiting period generally has 30 days initially from the policy activation date. The survival period under Critical Illness Term Insurance is between the range of 30 days to 90 days. However, the duration and the parameters are subjected to change according to the norms and regulations of your respective insurance provider.

    There are two types of Accidental Disability Policy – Short-term Disability Policy and Long-term Disability Policy. For a Short-term Accidental Disability Policy, the waiting period lasts between 0 days and 14 days. The benefits from this kind of Accidental Disability Policy last for a maximum of 2 years. For a Long-term Accidental Disability Policy, the beneficiary gets lifelong coverage, with the duration of the waiting period can range from weeks to months. 

  4. Benefit Payout

    Under Critical Illness Term Insurance Policy, the beneficiaries can get guaranteed benefit payout up to Rs 1 crore depending upon the premium charges and the availing options of any additional benefits. However, this benefit payout is subject to change as per the company’s norms.

    Under Accidental Disability Policy, a weekly benefit will be paid to the insurer for the financial loss. This is only during the case of short-term disability for a specified period. If an accident leads to a long-term disability, the policy beneficiary will receive a benefit payout of 125% of the sum assured. The sum assured is based on the premium charges paid by the policyholder, and some insurers provide a premium waiver in the base coverage.

  5. Eligibility

    So far, we saw the fundamental differences of both the insurance policies that will affect the general decision of choosing either of them. The following sections will mention some differences that will affect decisions individually and must be considered before purchasing either Critical Illness Term Insurance or Accidental Disability Policy.

    The eligibility protocols for buying a Critical Illness Term Insurance are mentioned below:

    • The person must be 18 years to 65 years.
    • If the person is above 45 years of age, then a pre-policy medical checkup is mandatory.

    The eligibility criteria for purchasing an Accidental Disability Policy are the following:

    • The minimum age for purchasing the policy is 18 years.
    • The maximum age is 70 years.
  6. Who Can Buy?

    For those who desire to purchase a Critical Illness Term Insurance, there are various factors to consider, and some of them are mentioned below:

    • People who have a history of critical illness in their family
    • People who are the sole bread-earner of their family
    • People who are above 45 years of age
    • People who work at high-pressure jobs

    The relevant factors for purchasing an Accidental Disability Policy are the following:

    • People who are drive frequently 
    • People who are the only earners in the family
    • People who work for those employers who do not provide necessary coverage.
    • People who are paying off debts.


These are the things that are excluded from coverage. Exceptions under Critical Illness Term Insurance are:

  • Diseases caused by addictive drugs
  • Diseases caused due to internal and external congenital disorder
  • HIV or AIDS
  • Infertility treatment
  • Treatment functioned outside Indian territory
  • Dental care or cosmetic treatments

Exceptions under an Accidental Disability Policy:

  • Self-inflicted injuries
  • Injuries caused by acts of wars
  • Injuries caused due to criminal activities
  • Injuries cause while driving intoxicated
  • Injuries caused by civil disobedience

Wrapping it Up!

To conclude, both critical illness insurance and accidental disability policy come with their share of benefits. While buying one, you should consider your requirements and compare the plans.

Written By: PolicyBazaar

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