What is Accident Insurance?: All You Need to Know | eHealth

November 8, 2022

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What is Accident Insurance?

Accident insurance is a type of insurance that helps cover medical costs and other out-of-pocket expenses that you may face following an accidental injury. It provides protection that fills the gap between health insurance and other policies like workplace or vehicle insurance. In addition to emergency treatment and hospital stays, accident insurance can also cover medical tests, transportation, lodging needs, and more.

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What Does Accident Insurance Cover?

Accident insurance, also known as fixed indemnity insurance, provides protection to the policyholder in the event of an accident. It covers both minor damages and major disabling events. However, it’s important to note that accident insurance is not a comprehensive policy. It does not cover vehicle damage or liability if you are responsible for a car accident.

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How Does Accident Insurance Work?

Accident insurance works differently from health insurance. While health insurance covers immediate treatment, accident insurance covers the financial burden that arises from the accident. This includes copays for hospitals, physical therapy, and other services not covered by your health insurance. One of the advantages of accident insurance is that payments are made in cash, providing immediate financial relief. There are no waiting periods, so you receive your money right away. Premiums for accident insurance vary based on coverage, so it’s important to understand what the policy includes and the types of accidents covered.

What Does Personal Accident Insurance Not Cover?

Personal accident insurance covers injuries resulting from accidents, but there are certain situations and conditions that are not covered. For example, injuries due to illness or disease are generally not covered. Extreme sports injuries, injuries from illegal or criminal activities, and injuries caused by being under the influence of alcohol or drugs are also excluded. Policies do not cover injuries sustained before activating the policy and self-inflicted injuries are never covered.

Why is Personal Accident Insurance Important?

Having accident insurance is crucial as a backup plan in case you are unable to work due to an accident and are facing costs not covered by other insurance plans. Here are five reasons why accident insurance is important:

It covers expenses not included in your regular or short-term health insurance plans. This can include rehabilitation or equipment like wheelchairs or crutches.
Unlike health insurance, accident insurance does not involve underwriting, so there are no limitations related to pre-existing conditions.
For self-employed individuals without sick days or workers’ compensation, accident insurance can provide coverage for the days you can’t work.
With the right coverage, you won’t have to worry about injuries that keep you from working, allowing you to live your life normally.
Accident insurance can be affordable, depending on your state and the coverage you need.

Who Should Take Out Accident Insurance?

Accidents can happen to anyone, so it is important for all family members to have accident insurance. This includes single people, the elderly, and individuals who regularly participate in sports or have hobbies with inherent risks. Accident insurance can also cover children’s expenses or reimburse a parent who needs to take time off work to care for an injured child.

Accident Insurance Versus Other Complementary Health Plans

Supplemental plans like accident insurance work well alongside major medical health insurance. They can also be used to protect you outside of open enrollment periods when you can’t enroll in a major medical health plan. Here are some other types of complementary health plans to consider:

Short-Term Medical Insurance

Short-term health plans offer temporary coverage when you can’t sign up for permanent coverage. While they may not offer the same comprehensive coverage as long-term medical plans, they provide fast enrollment, low premiums, and coverage for unexpected medical expenses.

Critical Illness Insurance

Critical illness insurance covers you in the event of a covered illness, such as a stroke, heart attack, or cancer diagnosis. Instead of reimbursing the hospital or doctor, this insurance pays you a lump sum directly to cover costs that may arise from your condition.

Fixed Compensation Plans

Indemnity insurance is designed to cover losses during a qualified event, such as an accident, injury, or serious illness. Similar to other supplemental plans, indemnity plans provide payments directly to you, allowing you to use the funds for any expenses you may face as a result of your illness or injury.

Find the Right Plan for You

Specialized eHealth brokers are here to help you find the right accident insurance or other insurance plan that fits your needs. You can purchase your plan online, through live chat, or with a phone call. With our expertise and experience, you can have confidence in finding the best options for your unique situation and budget. And if you’re looking for individual and family long-term health insurance, eHealth can show you the best available options in your area.

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