Why You Need an Accident Plan
An accident is an unfortunate incident that happens by chance and causes injury or damage. Regardless of how careful you are, an accident can happen to you at any time. It can result from someone’s reckless behavior or from being at the wrong place at the wrong time.
According to the CDC, the third cause of the most deaths in the United States is unintentional injuries. Data shows that about 39.5 million accidental injuries end up in the physician’s office while 29.4 million cases go to the emergency department.
Due to the unpredictability of accidents and the high cost of dealing with their impacts, it’s advisable to have an accident plan. Accident insurance can cover your medical expenses and compensate for lost income due to injury, enabling you to provide for your family more effortlessly.
Overview of Accident Insurance
Accident insurance is an additional coverage to your primary health insurance that pays some medical and non-medical costs following an accident. It pays lump sum cash benefits directly to the policyholder, not the hospital or doctor.
Even if your health insurance covers all your medical care after an accident, you are eligible for accident insurance benefits. There are no restrictions on how to use the money.
What Accident Insurance Covers
Accident insurance companies have different offers for policyholders. However, coverage primarily focuses on three areas – medical treatment and hospitalization, disability, and death.
Medical Treatment and Hospitalization
If you hold an accident insurance policy, you may be eligible for inpatient and outpatient medical expense benefits. The coverage may not be comprehensive, and you shouldn’t rely on it for all your medical treatment and hospitalizations costs.
However, most plans cover fractures, lacerations, dislocations, dental procedures, eye injuries, concussions, dismemberment, and accidental death. You can have an accident plan that includes your entire family. Besides injuries, accident insurance can cover:
- Ambulance rides and flights
- Emergency care, including urgent care and emergency room visits, and follow-up doctor appointments
- Restorative procedures, including eye surgery, tooth extractions, dental crowns, and prosthetics
- Diagnostic tests like X-rays, MRIs, EEGs, and CT scans
- Admission and stays in rehabilitation and intensive care unit
- Accidental injuries to children when participating in organized sports
- Physical therapy
The cash benefit paid to the policyholder depends on the type and severity of the injury and the prescribed treatment. For instance, if you have an injured leg, your accident plan may pay for crutches, prosthetic limbs, and other medical devices.
Your accident plan may accommodate hospitalization benefits. The settlement comes as a fixed daily allowance based on the hospital services the insured enjoys.
Partial or Permanent Disability
An accident can lead to physical disability or the impairment of vital organs, making an individual unable to earn an income. Whether an accident makes you partially or permanently disabled, your accident insurance company will issue a payout.
You can use the money on medical treatment, utility bills, or meeting your daily needs. Depending on your cover, you may also get funds for mobility aids, home modification for better accessibility, or other expenses emanating from the accident. Additional riders can provide income replacement benefits.
Death Benefits
Death is one of the most devastating events. When someone with an accident plan loses their life due to an accident, their dependents receive a benefit equal to the insured amount. The payout is on top of any life insurance the deceased may have had. Accident insurance strengthens the family’s financial security when the breadwinner passes away in an accident.
Accident Insurance versus Similar Insurance Plans
Accident insurance is one of the covers designed to ease the burden of medical bills. Below are complementary insurance plans that are sometimes confusing to clients.
Accident Medical Expense (AME)
AME provides you with the financial support you require to pay out-of-pocket medical bills associated with an accident. It may pay the costs your regular health insurance doesn’t cover. The insurance plan includes dismemberment and accident death benefits.
AME transforms medical expenses that would be economically draining into manageable costs. However, the policy does not cover every other accident, and exclusions may vary with insurance carriers. Below are some reasons for loss or injury where AME may not protect.
- Suicide attempt or self-inflicted injuries
- Criminal or illegal activities
- Injuries sustained before buying insurance
- Dangerous or reckless activities
- A declared or undeclared war
- Handling or transporting explosives
- Air travel except as a fare-paying passenger
- Intoxication or influence of alcohol or certain drugs
- Disease or illness or complications due to surgical treatment
- When a covered individual is in active duty in the armed forces
- When a motor vehicle operator doesn’t have a valid driving license
- Flying in any craft designed for navigation above the earth’s atmosphere
- Parachuting, bungee jumping, hang gliding, or traveling in an ultra-light aircraft
- Driving or riding in off-road automobiles, including all-terrain vehicles
- Competing in motorsports or testing cars on a racetrack
- Participating in rodeos
Health Insurance
While accident insurance covers medical bills following an accident, it doesn’t replace health insurance. A health insurance policyholder who sustains injuries in an accident may have to pay some out-of-pocket costs before the insurer pays any benefit.
These expenses may include deductibles, copayments, and coinsurance charges. Accident insurance covers such fees and other out-of-network costs before the health insurer begins paying for care.
Disability Insurance
Like an accident plan, a disability insurance cover pays the policyholder when injured in a way described in the policy. However, the insured only receives a benefit if the injury sustained prevents them from working. On the other hand, accident insurance pays benefits regardless of whether or not the injury prevents the policyholder from working.
Accidental Death and Dismemberment Insurance (AD&D)
If a person with AD&D insurance passes away, the insurance company pays the beneficiaries a benefit. The amount comes on top of what the deceased person’s life insurance offers. Some accident insurance companies provide AD&D coverage.
Accident Insurance Policy Structures
You can choose an accident plan from the three fundamental policy structures described below:
Individual Policy
Insurance companies have individual accident insurance plans for a single person who isn’t purchasing through an organization. Policyholders can include their family members in the policy.
Group Policy
Group policies target individuals in an organization, usually employees. The plan comes with the same offerings and prices for the whole group.
On-Demand Accident Policy
On-demand policies are customizable to the client’s preference. For instance, a policyholder may apply to get coverage for a given duration. Policies with shorter terms have lower prices than more extended ones.
Importance of an Accident Plan
Many people don’t appreciate the importance of including personal accident coverage in their overall insurance plan. Some think the cover is for individuals working in high-risk environments.
However, an accident plan is vital even if you have health or life insurance. Below are the unique benefits of an accident insurance coverage.
Accidents Are Unpredictable
An accident can strike anyone at any time, no matter how careful a person is. Apart from being unpredictable, they can have disastrous outcomes.
Health insurance may pay for your medical bills if you get injured in an accident, but what happens if you are unable to resume work? You might quickly deplete your emergency savings.
An accident plan can provide a financial buffer if an accident prevents you from working again or depresses your earning power. The lump-sum payment from your insurance carrier will make up for lost wages.
Coverage for Outpatient Care
Some tests and treatments like scans and X-rays after an accident can be costly. The beauty of a personal accident policy is that you can claim compensation for some inpatient and outpatient care procedures.
Unlike hospitalization insurance plans, an accident policy doesn’t require you to get hospitalized to claim medical treatments. Having an accident plan is an excellent way to complement your health insurance for more comprehensive care at the health facilities.
Home and Vehicle Customization
An accident plan helps you to adapt if you suffer an accident that leaves you with a disability. For instance, you may have to install ramps or modify your washroom for easier accessibility. If you still have to drive, it might be necessary to alter your car.
These modifications are vital, but they can be overly expensive. Your accident insurance can cover the associated costs to give you a more fulfilling life after an accident.
Ample Coverage
Health insurance only chips in when you get hospitalized, and it doesn’t provide any lump-sum payouts to support you and your family. Life insurance only pays benefits after your demise or when you become disabled.
With a personal accident plan, you can have more peace of mind. The insurance company pays the benefit to you. You can spend the money on the most pressing issues and focus better on recovery.
School Fees for Children
An accident insurance plan can help you pay school fees for your children when you get injured in an accident. The insurer may pay the full amount or a percentage of your child’s tuition fees.
Choosing the Right Accident Plan
Are you considering investing in an accident insurance plan? Our agents at Healthcare Solutions Team will help you.
We simplify the arduous process of understanding insurance coverage plans and selecting the right policy. With unrivaled industry knowledge, we provide our clients with customized programs that offer solutions for your needs.
Contact our agents for expert advice regarding health and accident insurance plans.
Healthcare Solutions Team is a wholly owned subsidiary of the National General Insurance Group and the Allstate Insurance Company.