Accident Insurance
You can’t predict when and where accidents will happen. However, you can protect yourself, your family, and your assets from the effects of an accident. Accident insurance provides benefits to cover costs associated with the accident, living costs during recovery and financial protection against loss of limbs. Accident insurance policies can be purchased through employers or individually.
Accident insurance benefits cover expenses for the ambulance, hospital and doctors. In addition, during a long recovery period the policy will also usually cover living expenses and physical therapy expenses. The policy also provides benefits in the case of death resulting from an accident to help with funeral expenses. Insurance companies typically will cover a death that occurs within a year after the actual accident. The last common feature of accident policies is financial protection against the loss of limbs. To help a severe accident survivor transition to new circumstances, accident policies not only pay benefits for dismemberment, but also loss of senses, such as eyesight, hearing or speech. The coverage levels are expressed as percentages of the full benefit level and if multiple losses occur the policy benefit is determined by the injury with the highest benefit level. These benefit levels are based on total loss as a result of the accident. If partial loss or loss of use occurs a lower benefit amount may be covered by the policy.
Accident insurance is available directly from insurance companies, through authorized agents and as an employee benefit. Many employers either provide accident insurance to employees or offer the option to purchase group coverage. When an employer pays the premiums on the policy the covered individual will be required to claim any benefits as income. If the employee pays the premiums or purchases the policy themselves, the benefits paid out by the policy will not be taxable income. Accident insurance can be purchased independently from a wide variety of sources. In addition to insurance agents and brokers, financial planners often carry the licensing needed to provide these products. Make sure the agent, broker, or planner you work with is properly registered with your state’s insurance department.
When comparing accident insurance policies the most important factor to look at is the exclusions. These exclusions usually include provisions for time periods or circumstances when the insured is not covered by the policy. This includes times such as when the person is working or traveling abroad. Most personal policies exclude time at work since employers typically must carry insurance protecting employees while they are on the job. Risky and dangerous activities are also commonly excluded from coverage. Activities such as skydiving, bungee jumping, racing and many others are often part of a long list of excluded activities. If you engage in one or more of these activities it might be beneficial to purchase a rider on your accident insurance to provide coverage during that activity.