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

November 8, 2022

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Accident insurance helps you pay for medical costs and other out-of-pocket expenses you may incur after an accidental injury. This includes emergency treatment, hospital stays, medical tests, as well as other expenses you may face, such as transportation and lodging needs. Accident insurance can provide protection that fills the gap in coverage between health insurance and other policies, such as workplace or vehicle insurance.

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Here’s a closer look at what personal accident insurance is, what it does and doesn’t cover, and why it’s useful.

Reading: What is accident insurance coverage through employer

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what is accident insurance?

Personal accident insurance, also known as fixed indemnity insurance, provides protection to the policyholder in the event of an accident. In most cases, an accident is an unintentional event that leads to an injury. In some cases, someone else could be partially or fully responsible for causing the accident.

These policies can cover both minor damage and major disabling events. Accident insurance is different from automobile, health, or employment insurance. however, it is also necessary to have this other coverage because accident insurance is not a comprehensive policy. for example, it will not cover vehicle damage or liability if you are responsible for a car accident.

How does accident insurance work?

First, you need to understand the difference between accident insurance and health insurance. Health insurance covers you for the immediate treatment you receive after an accident, while accident insurance covers any financial burden you incur due to the accident. this may include copays for hospitals, physical therapy, other services not covered by your health insurance, and any out-of-pocket expenses for the accident.

One of the biggest advantages of accident insurance is that payments are made in cash, which can ease the financial burden you experience after an accident. Plus, there’s no waiting period, so you get your money right away.

Accident insurance premiums vary by coverage. it is essential to understand what the policy includes and also the types of accidents covered.

what does accident insurance cover?

Accident insurance covers qualifying injuries, which can include a broken limb, loss of limb, burns, lacerations, or paralysis. In the event of accidental death, accident insurance pays money to your designated beneficiary. while health insurance companies pay your provider or facility, accident insurance pays you directly.

Accident insurance is considered supplemental insurance and is most useful when used in combination with a primary medical plan. your accident coverage will take care of expenses not covered by your medical plan, such as copays and your deductible. It will also cover non-medical costs like mortgage or rent, utility bills, and other everyday expenses.

What does personal accident insurance not cover?

Accident insurance covers the policyholder and focuses on the shortcomings that major medical expenses or critical illness insurance cannot cover. It is also essential to know the limits of the accident policies. here are some things that are not covered.

If you have an accident due to illness or disease, like something that causes heart failure or seizures, you probably won’t be covered.
The policy normally excluded injuries due to extreme sports such as bungee jumping or scuba diving.
You will not be covered if the injury occurs while you are engaged in illegal or criminal activity.
If the incident occurred while you were under the influence of alcohol or drugs, you will not receive a cash payment.
Policies only cover you after they’re activated. therefore, they do not pay for injuries sustained before you activated the policy and paid your first premium.
Self-inflicted injuries are never covered by policies.

why is personal accident insurance important?

It is crucial to have a backup plan if you are unable to work due to an accident and are facing costs not covered by other insurance plans.

here are five reasons why an accident insurance policy is important.

covers things that are not included in your regular or short-term health insurance plans. For example, if you need rehabilitation or equipment like a wheelchair or crutches, you can get medical care.
Underwriting health insurance can be discriminatory because it sometimes refuses to cover injuries due to pre-existing conditions. however, accident insurance coverage does not involve underwriting, so there are no such limitations.
If you’re self-employed and don’t have sick days or workers’ compensation, a fixed indemnity policy may cover you for the days you can’t work.
With the right coverage, you won’t have to worry about injuries that keep you from working. you can live your life normally knowing you have additional coverage.
Unlike health insurance, accident insurance can be affordable depending on your state and the coverage you need.

Who should take out accident insurance?

Paying something out of pocket puts a strain on your finances, especially if the accident has left you unable to work. An accident can happen to anyone, so it is imperative to have all family members on your insurance policies. Personal accident insurance can even cover children’s expenses or reimburse a parent if he or she has to stay home from work to care for an injured child.

Single people, the elderly, and those who regularly play sports or have hobbies without risk can also benefit from a policy that protects against the inconvenience of injury.

accident insurance versus other complementary health plans

Supplemental plans work well with medical health insurance, but can also be used to protect you outside of open enrollment when you can’t enroll in a major medical health plan. It’s important to understand your supplemental coverage options and how they differ so you can choose the best plan for you.

short-term medical insurance

Short-term health plans offer temporary coverage when you can’t sign up for permanent coverage. This coverage can protect you from medical bills that can arise from emergencies or health changes when you don’t have a major medical plan. You may be eligible for short-term health insurance if you lose coverage from your employer and are waiting for coverage to start with a new employer or if you are outside of open enrollment.

Short-term health plans typically don’t offer the same comprehensive coverage as a long-term medical plan, but they can offer fast enrollment, low premiums, and coverage for unexpected medical expenses. At ehealth, we offer a wide range of short-term health plans to help you get the coverage you need when you need it most.

critical illness insurance

Critical illness insurance is designed to cover you in the event of a covered illness, such as a stroke, heart attack, or cancer diagnosis. unlike a traditional health plan that reimburses the hospital or doctor for the care you receive; Critical illness insurance pays you a lump sum directly to cover costs that may arise as a result of your condition.

Like a short-term health plan, critical illness insurance can be obtained quickly and can be purchased at any time of the year. you can choose the level of coverage you want to receive and the specific conditions covered may also vary from plan to plan. our brokers can help you find a critical illness insurance plan that best fits your needs and budget.

fixed compensation plans

Indemnity insurance is designed to cover things you could lose during a qualified event, such as an accident, injury, or serious illness. Like the other supplemental plans listed here, an indemnity plan’s payments go directly to you instead of to your doctor or hospital. These plans are most effective when they provide another layer of protection by covering costs that are not included in your main medical insurance.

Since the money is paid directly to you, you can use the funds for any expenses you may face as a result of your illness or injury. these plans usually offer competitive rates and no deductibles. the payment you receive is fixed according to the specific terms of the plan. If you’d like more information about fixed indemnity plans, contact ehealth today.

find the right plan for you

specialized ehealth brokers are licensed and qualified to help you find the right accident insurance or other insurance plan that works best for you. you can purchase your plan online, via live chat, or with a phone call. we offer knowledge, experience, and expertise superior to other alternatives, so you can be confident that we can help you find the best options for your unique situation and budget. Plus, if you end up looking for individual and family long-term health insurance, eHealth can show you the best options available in your area.