The ‘Benefits’ of Accident Insurance and How It Can Supplement Your Health Insurance Policy

Do you know what benefits you are entitled to if you have an accident insurance policy? Let’s break things down… an accident insurance policy pays out a lump sum if you incur specific kinds of injury as a result of an accident. Similar to, but legally distinct from health insurance, accident insurance complements disability insurance by allowing you to claim benefits even if the injuries you incur do not keep you out of work. Accident insurance may also complement health insurance if an accident causes you to have medical expenses that your health insurance doesn’t cover.

Accident insurance works similarly to other types of insurance policies, like a disability insurance policy. You periodically pay a premium and in return you receive coverage. If you are injured in one of the ways listed in the accident insurance policy, you’ll receive a benefit.

What’s covered by accident insurance

Accident insurance pays a lump sum that can help you cover the costs associated with an injury incurred during an accident. Each accident insurance company is different, but you should learn what they cover before taking out an accident insurance policy.

Injuries are divided up into categories to better assess risk and coverage. These can include:

  • Dislocation
  • Laceration
  • Concussion
  • Fracture
  • Eye injury
  • Burn
  • Dental

Costs of accident insurance

Accident insurance is relatively inexpensive. You can take out a policy for between $6 and $20 per month if you’re young and healthy. However, accident insurance policies frequently have deductibles that need to be met out of pocket for care before you receive the benefit to take care of the rest. Like health insurance, the more you pay in premiums, the lower your deductible will be. Also like health insurance, higher premiums generally tend to get you better coverage.

How accident insurance complements other insurance coverage

Accident insurance vs. disability insurance

 Accident insurance is very similar to disability insurance in that, for both cases, the insurance company pays out when you incur an injury. In terms of what kinds of injuries are covered, accident insurance has a lot of overlap with disability insurance.

Disability insurance, however, pays out a much larger benefit – often as high as 60% of your income, which is paid out each month like a traditional paycheck, rather than a lump sum that could fall short of a thousand bucks. Disability insurance often covers disability caused by illness as well, which is not covered by accident insurance.

Accident insurance and disability insurance complement each other in two ways:

  • You were injured, but the injury doesn’t keep you out of work, so your disability insurance company won’t pay you a benefit. Your accident insurance company may still pay you a benefit.
  • You became disabled, but the cause of the disability isn’t one of those covered by your accident insurance policy. If it’s enough to keep you out of work, your disability insurance coverage should kick in even if your accident insurance coverage does not.
  • You can use the accident insurance benefit as a small payment while you wait for the disability insurance elimination period to end.

Like disability insurance, accident insurance should pay out whether the injury was incurred on the job or off.

 Accident insurance vs. health insurance

 Injuries incurred while covered by accident insurance don’t need to be disabling to qualify for accident insurance benefits, so the benefit could be useful to cover small gaps in coverage from disability insurance and health insurance. You can use accident insurance to help pay down a health insurance deductible or a copay, for example.

Accident insurance can also cover unexpected medical costs that your health insurance doesn’t cover. For example, if you need stitches, your health insurance will cover the hospital stay required to get sutures. But your health insurance won’t pay you any money for the injury; it’ll just pay the doctors who stitch you up. An accident insurance policy makes sure you get a few bucks back in your pocket, too. Although accident insurance resembles health insurance in the way that it pays benefits out for medical claims, it is not a replacement for health insurance and does not satisfy the Affordable Care Act’s health insurance coverage requirements.

Is accident insurance worth it?

Accident insurance is relatively inexpensive. You might benefit from an accident insurance policy if your health insurance has high deductibles, because accident insurance offers a one-time payout that can help you afford medical care. You’ll also benefit from accident insurance if you aren’t eligible for disability insurance, such as if you have pre-existing medical conditions that insurers don’t cover.

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