Accident Insurance: What You Need To Know

Accident Insurance: What You Need to KnowWhen most of us hear the phrase “accident insurance,” we automatically tend to think it won’t happen to us. It’s our natural human tendency to not want to focus on some of the scarier things in life—accidents and injuries most definitely included.

Unfortunately this inclination to turn away also often leaves us vulnerable and unprotected should an accident occur.

The reality is by the time we reach retirement age, one out of every four of us will be out of work due to illness or injury for longer than our accrued paid time off allows.

Accidents can happen to any of us, at any time. They might be as simple (but painful) as a papercut, or more serious and require time off of work. That’s why protecting your income with disability and/or accident insurance is so important. 

But with more insurance options, comes more questions.

  • Why do I need accident insurance?
  • If I already have disability insurance should I get accident insurance as well?
  • Which one is the best option?

Let’s start by explaining the difference between accident and disability insurance.

What is Accident Insurance?

Accident insurance provides a lump-sum cash benefit to help offset costs associated with a covered injury.

Accident insurance helps with co-pays for treatments as well as with out-of-pocket expenses paid up front on High Deductible Health Plans (HDHPs).

If a claim is approved, payment is sent for covered injuries such as fractures or dislocations, and for covered treatments of those injuries, such as emergency room fees or out-patient visits.

What is Disability Insurance?

Disability insurance pays you a regular payout when you’re sick or hurt and can’t work.

It protects your income from the very real possibility you’ll become disabled  for a period of time during your career, whether due to injury or illness.

If you have disability insurance through your employer, you may pay for the policy, your employer may pay for the policy, you may split the cost – regardless, you’re the one who’s paid if you can’t work because of the disability.

How Accident Insurance and Disability Insurance Work Together

These two benefits are different from each other but they can certainly complement each other.

For example, if you fall and break your leg, accident insurance provides you a one time lump sum cash payment to help with co-pays you might incur for treatment.

If your broken leg means that you can’t return to work then you would file a claim for short-term disability benefits to ensure that you receive regular replacement income.

The great thing about both these plans is they are typically independent of each other which means you can receive benefits from each plan without affecting either amount.

Is Accident Insurance Right For You?

Not sure you actually need accident insurance?

Are you a health fanatic or into active sports? Are you the parent of children who play sports? Are you getting older and your bones are getting weaker?

If you answered yes, you understand accidents and injuries can happen.

Unexpected  costs can add up really fast. As a result of your accident, you may need to take a trip to the emergency room or your doctor’s office to be treated for an injury. There could be other costs such as x-rays, surgery and even hospital stay.

Accident insurance can help supplement your health insurance and provide you with additional financial protection.

Let’s go back to our broken leg example. If you break your leg and have to be taken to the hospital. If you have accident insurance you would receive a lump sum cash benefit to cover treatment for your broken leg. The cash benefit you receive could cover expenses such as transportation to the hospital, the emergency room visit, diagnosis, crutches, medications, any follow up appointments with your doctor and any physiotherapy.

Factors to Consider When Purchasing Accident Insurance

  • Flexibility – Is there flexibility in choosing the amount of coverage that suits you and your family’s needs?
  • Affordability – How much are the monthly premiums?  Are there are any other costs associated with purchasing accident insurance? Can you afford this policy?
  • Convenience – What is the process of applying for this type of coverage? Is there a medical or physical exam required? What are the requirements around acceptance of your application?
  • Risk – Are there any risks for you associated with this policy? What are the rules around cancellation or refunds should you change your mind?

These are the types of factors you’ll need to consider once you’ve decided to purchase accident insurance. Be sure to ask all your questions. This is where an insurance agent can be extremely useful. They can help you understand the language in your policy, alleviate your concerns and fears, and guide your decision around which accident insurance policy is right for you.