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.
The “This Won’t Happen to Me” SyndromeWe 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.