What kind of policies are personal accident and sickness insurance described as?

Personal accident and sickness insurance are categorized as benefit policies because they provide a specified monetary benefit to the insured or their beneficiaries in the event of an accident or illness. Unlike indemnity policies, which aim to compensate the insured for the actual loss incurred, benefit policies offer a predetermined sum regardless of the actual expenses or losses. This approach allows policyholders to receive financial support that can be utilized for various needs, such as covering medical costs, loss of income, or compensating for a reduction in quality of life due to an accident or illness. This characteristic makes benefit policies particularly valuable for individuals seeking financial security in situations that could severely impact their earning capacity or overall well-being.