What is accident insurance and is it worth it? (2024)

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Big or small, accidents happen. And the costs related to recovery can add up. With more and more workplaces switching to high-deductible health plans (HDHP), it’s become even more difficult for people to rely solely on their core medical insurance to cover all of their healthcare needs. According to Kaiser Family Foundation's 2019 Employer Health Benefits Survey, the average premium for family coverage has increased 22% over the last five years and 54% over the last ten years. This is where supplementing your insurance with additional coverage can be valuable – and essential. Accident insurance can help. Accident insurance can help you keep up with some of the most important things in life should the unexpected happen.

Watch this video to learn about how accident insurance generally works.

Read on to learn about accident insurance:

• What is accident insurance?
• How does accident insurance work?
• What does accident insurance cover?
• Is accident insurance worth it?
• How much does accident insurance cost?
• How to get the best accident insurance policy.

Accident insurance, also called accident expense or accidental death insurance, gives you cash if you get injured or die from an accident covered by your policy. It pays a benefit directly to you (or your beneficiaries in case of death) for injuries resulting from a covered accident. Here are a few types of things accident insurance might cover:

• Emergency treatment
• Hospital stays
• Medical exams
• Supplies
• Lodging
• Final expenses

Accident insurance is a type of product sold by insurance companies. If you get injured and it’s caused by a specific accident covered by your accident insurance policy, you or your family can file a claim. The insurance company will pay you cash as long as you’ve been paying your premiums (often a monthly payment). You can use this cash however you choose – pay off your medical bills or put it toward your mortgage, childcare, college tuition or even a vacation. If the accident results in death, the benefit would be paid directly to your beneficiaries.

Accident insurance complements health insurance too. If an accident results in medical expenses your current health insurance doesn’t cover, accident insurance can serve as a financial cushion should the unexpected happen. Accident insurance also helps complement disability insurance by allowing you to claim benefits even if your injuries don’t keep you out of work. While both types of insurance help cover similar injuries (everything from a dislocated shoulder to quadriplegia), disability insurance pays you benefits for each month you remain disabled. Accident insurance pays out a preset number of times over a specific range of time, or all at once (called a lump sum) – you choose. Accident insurance benefits are lower than disability benefits, but lower benefits mean lower premiums. While you wait for your disability insurance elimination period to end (the length of time between the beginning of an injury and receiving benefit payments from an insurer), you can use the benefit you get from your accident insurance policy as a small payment in the meantime.

Accident insurance provides specific cash benefits for injuries caused by a covered accident. These cash benefits may be used for expenses like copays and deductibles. Like disability insurance, your accident insurance policy should pay you or your beneficiaries a cash benefit whether the injury occurred on or off the job. And you can use the money however you want – pay off bills or take a vacation.

So how does it work?

Let’s say your child, who is already covered on your accident insurance policy, fractures his ankle during a football game and is taken by ambulance to the ER. X-rays determine he has a severe fracture, requiring a hospital stay. Your son is released the next day with a nifty little cast. Because you haven’t met your deductible for the year, you find your health insurance doesn’t cover the entire medical bill. So, you’re left paying hundreds or thousands of dollars out-of-pocket. However, since you have accident insurance, you can simply submit this claim to the insurance company you bought it from. After the claim has been approved, you receive the cash (this only takes about 10 business days with Assurity).

Here are some of the advantages to having an accident insurance policy:

• Immediate protection within days of receiving your application
• Helps cover out-of-pocket expenses
• Benefits are paid directly to you
• Guaranteed issue or guaranteed renewable (Some insurance policies require no medical exams or tests to qualify, while others do. Once you’ve been accepted, your rates cannot be raised and your policy cannot be cancelled up to a certain age as long as you continue to pay your premiums.)
• No deductibles, copays or coinsurance
• Health Savings Account (HSA) friendly

As a leader in the accident insurance market, Assurity is always looking at how we can help our customers deal with increasingly high deductibles. As the cost of healthcare continues to rise, even a small accident could turn into a big problem for many families. Accident insurance brings meaningful coverage with real cash benefits, and it’s important to understand your coverage and get help when you need it.

Accident insurance provides a cash payment that can be used to pay for medical expenses resulting from a covered accident. Healing and getting healthy shouldn’t mean a gut-punch to the bank account or regular daily life. That’s why these payments can be used for other expenses too – mortgage or rent, groceries, bills, even childcare. You or your family have the freedom to choose how you want to use your money.

So, what does accident insurance actually cover?

Here is a broad list of what’s covered by an accident insurance policy, along with a few specific types of injuries that may be covered within each category:

• Emergency care – hospital treatment, ambulance, X-rays, exams or ER visit
• Specific injury care – burns, concussion, emergency dental work, ear or eye injury or poisoning
• Supportive care – follow-up treatment, physical therapy, prescription meds, supplies, or even transportation and lodging
• Hospital care – hospital admission/confinement, intensive care or rehab unit
• Surgical care – major surgery, ruptured disc, hernia, outpatient surgery or anesthesia
• Accidental death – benefit is paid directly to your beneficiaries if your death is a result of an accident
• Preventive care – some policies offer a wellness benefit that pays you cash back for routine blood work, immunizations and more

The types of injuries listed above are not a complete list. In most cases, the more severe the injury, the higher the benefit amount. For conditions that may be less serious, like a cracked tooth or eye injury, your benefit may only be a few hundred dollars. For more serious conditions, such as a coma or paralysis, you can expect a benefit as high as $40,000 or $60,000. Some accident insurance policies also cover the use of medical supplies and devices, such as crutches or even a prosthetic limb. If you die from an accident, as much as $350,000 could be paid to your beneficiaries.

What’s not covered?

If your insurance company doesn’t specifically identify your injury, you won’t receive a benefit. Accident insurance typically does not cover suicide, accidents arising out of illegal activities, self-inflicted injuries, etc. So, if you were drinking while you got injured, it’s very possible your claim would be denied.

Additional insurance (riders)

Many insurance plans offer riders – options you can add for additional coverage. A common rider available for accident insurance plans is an accidental death and dismemberment rider. This type of rider pays out a benefit to the deceased’s beneficiaries if the insured died or became dismembered (loss of a limb) from an accident. Many individual accident insurance policies offer accidental death insurance as part of the policy, not as an optional rider – oftentimes it’s actually called accidental death insurance.

Eligibility

Each insurance company has different rules about who is eligible to get benefits. For one, you must be 18 years of age. And at a certain age your accident coverage may end, usually between age 60 and 75. Coverage can be available for both individuals and families, including spouses/domestic partners and children.

Accident insurance is not too complicated. In the event of your death or a disability due to an accident, it would pay you or your beneficiaries cash.

Who may need accident insurance?

• Individuals and families with active lifestyles
• Individuals and families with small children
• Anyone with current health insurance
• Anyone with a limited budget for unexpected medical expenses
• If you’re looking for an affordable alternative to life insurance or if you want to supplement your life insurance coverage
• If you’re unable to qualify for life insurance due to medical reasons
• If a pre-existing condition makes you ineligible for disability insurance, you could receive benefits instead through an accident insurance policy

High health insurance deductibles and unpaid bills can affect your lifestyle, home and family. If your health insurance has higher deductibles or copays, you may benefit from taking out an accident insurance policy. This is because accident insurance offers an easy one-time payment that can help offset your medical expenses. Also, many accident insurance policies are portable, meaning if you leave your job you can take your accident insurance policy with you.

Accident insurance is a relatively cheap insurance policy. If you’re looking for an affordable alternative to life insurance, accident insurance may be a good fit for you. Accidental death may not seem very likely, but it happens more often than you may think to people in certain age groups, jobs and lifestyles.

To figure out how much accident insurance is right for your family, consider how much they would need if you were either slapped with a large medical bill as a result of an accident you were in, or if your family lost your income because of your death, with no time to prepare. If you’re like most Americans, your monthly budget probably doesn’t leave as much room for the unforeseen as you’d like. Without your income, what would your family need to keep daily living expenses covered and long-term plans on track?

How would they cover:

• Essentials like groceries and childcare
• Mortgage or rent
• Utlity and phone bills
• Regular loan or car payments
• Planning ahead for children’s education or retirement

Deciding on the best type of accident insurance to fit your current situation can be easier than you think. There are two ways to get it and there are two different types of accident insurance to consider.

You can get accident insurance two different ways:

1. Through an insurance professional
2. Through your workplace (sometimes called voluntary or worksite benefits)

If you’re currently connected with an insurance professional, you can ask them about adding an accident insurance policy to your existing coverage. If you’re currently employed, you can reach out to your employer (typically someone in an HR benefits role) to see if your company offers supplemental insurance, such as accident insurance. If so, you could enroll in their group plan during open enrollment season, which usually occurs between November and January.

Once you decide which path to take, think about the type of insurance you’re looking for based on where you’re at in life. The two types of accident insurance to consider are:

• Accident expense insurance – coverage for injuries resulting from an accident
• Accidental death insurance – benefits paid to your beneficiaries in the event of an accidental death

No one wants to think an accident could happen, but if it does, accident insurance can help. To learn more about accident insurance, ask your insurance professional for more information – or check out Assurity’s Individual Acci-Flex Accidental Death Insurance or our Group Accident Expense Insurance for the workplace.