Home Economy Accident Insurance: How to Know When You Need It

Accident Insurance: How to Know When You Need It

by Lisa Baker
Most consumers know the basics of life and health insurance, and even disability income protection. But one type of personal insurance about which you don’t have as much information as you should be is personal accident insurance. In fact, unless you work in the insurance industry, you probably only have a vague notion of what accident insurance is, and no, we are not talking about auto insurance. Simply put, accident insurance pays a benefit to you and / or your family in the event you are injured or killed in an accident. When weighing your overall insurance needs and options, it’s smart to consider accident insurance. For one thing, it’s very affordable. On the other hand, it is generally easier to obtain than other types of insurance, although it helps to cover the gaps in those primary coverages. But not everyone needs accident insurance all the time. Here’s how to know when to put it to work for you.

What Accident Insurance Covers

“Accident Insurance” is a general term that encompasses many different types of coverage. Sometimes, you will find them all in one policy, and other times, they will be offered independently:
  • Accidental Death and Dismemberment (AD&D) insurance – this insurance pays a lump sum benefit to your beneficiaries if you die as a result of an accident, and pays a smaller sum if you lose a limb or an eye. The benefit is paid in addition to any life insurance you may have.
  • Accident Medical Expense Benefit – This type of coverage generally pays lump sum benefits for various medical expenses incurred as a result of an accident. For example, if you break a leg, your policy may pay $ 400 for the ambulance, $ 500 for the emergency room, $ 1,000 for surgery, and $ 1,500 for your hospital stay — all paid in addition to health insurance.
  • Accident Disability Benefits – If you are injured in an accident and cannot work, or can only perform some of your duties, this coverage will pay a percentage of your monthly income. If you are injured on the job and collect Workers’ Compensation benefits, these benefits may be decreased by such compensation, depending on your policy.
In addition, there are specialized types of employee accident coverage, including business travel accidents for executives and sales personnel, workplace accident protection for professional drivers, and voluntary group accident coverage, that employers can make available to everyone.

The “This Won’t Happen to Me” Syndrome

We are all familiar with the phrase “accidents happen,” but most of us tend to think that they happen to other people and not to us. However, the statistics don’t lie — we are all at greater risk than we think. For example:
  • Accidents are one of the top three causes of death globally, along with heart disease and cancer, according to the United States National Safety Council .
  • Injuries are the leading cause of death for Americans under 45, according to the Centers for Disease Control .
  • Car accidents are the most common type of fatal accident. The odds of dying in a car accident are one in 114, based on data from the National Safety Council.
  • Other leading causes of accidental death in the United States include falls, firearms, pedestrian accidents, drownings and fires, according to the same source.
Although these factors are not pleasant to think about, they are a good reminder that accidents are a part of life.

5 Situations In Which You Will Need Accident Insurance

If you have comprehensive life, health, and disability insurance, you probably don’t need additional accident insurance at this time. However, in the following situations, accident insurance can provide valuable financial security that you would not otherwise have:

When You Don’t Have (or Don’t Have Enough) Life Insurance Coverage

If health problems make it difficult for you to qualify for life insurance, or you cannot pay your premiums, Accidental Death and Dismemberment insurance is a great solution. Not only is it inexpensive, but most policies require little or no medical underwriting. This makes sense especially if you are young, as accidents are the leading cause of death for people under the age of 45.

When Your Health Insurance Plan Has Gaps

If your health insurance has a high deductible, high coinsurance percentages, or a limited provider network, accident medical expense insurance, which pays fixed amounts of benefits for specific medical services, can lower your costs and additional out-of-pocket payments by health insurance.

When You Don’t Have Adequate Disability Income Protection

Perhaps you are self-employed, work part-time, or your employer does not offer disability insurance. With accident disability benefits, you will still have a secure income in the event you are injured and unable to work.

When You Drive Long Distances

Auto crashes are the most common type of fatal accident, so if your job is to hit the road frequently, such as a truck driver, home delivery person, salesperson, or service technician, services, you can benefit from accident insurance. Find out what kind of protection your employer offers and consider supplementing it if it doesn’t seem to be enough.

When You Are Engaged in a High Risk Job or Game

Obviously, some lines of work, such as construction and law enforcement, are more dangerous than others. The same can be said for certain activities or hobbies, such as motorcycle riding, diving, etc. If your lifestyle places you at greater risk than normal, you may want to invest in accident insurance, especially if you have a family that depends on you. Tip: Before purchasing a policy, be sure to check the exclusions; some jobs and activities are not covered. If you decide that accident insurance makes sense for you, do a little research. See what coverages are available from insurance companies you know and trust. Review the benefits, costs, terms, and exclusions of specific plans. How do we know so much about accident insurance? PALIG has been a trusted insurer in this market for many years. If you need accident insurance, learn more about the detailed plans we offer for individuals and their families.

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