Nobody plans for an accident to happen, but they are more common than you might think. In fact, over 35 million people each year are treated in an emergency room for an injury related visits.¹ These injuries, can be severe, like a broken bone or severed limb, or minor like sprain or cut. Regardless of the injury, you can be left footing a hefty medical bill if you are relying on health insurance alone.
Health insurance is essential and will typically cover the bulk of the cost if you get sick or are injured; however, it often comes at the expense of a high deductible. The out-of-pocket costs of your health insurance by themselves may be difficult to pay, however, if you are injured you might also have to miss work, which typically means losing out on pay. While you or a family member recovers from an accidental injury, items like childcare, mortgage payments, and even groceries still need to be paid. Your health insurance typically will not cover these costs. Supplemental Accident Insurance can help you minimize all of these costs and typically pays a cash benefit directly to you so that you can focus on your recovery.
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Why do I need accident insurance and what are the benefits?
Accident insurance is a supplemental insurance plan that pays a benefit if you get hurt unexpectedly. Your accident insurance benefit allows you to defray the out-of-pocket cost of your deductible as well as non-medical costs that you may need help paying such as your mortgage, childcare, or even groceries.
Supplemental accident insurance and health insurance function very differently from one another. With health insurance you are covered for a number of health issues that accident insurance typically doesn’t cover, such as sicknesses, chronic issues, or disease. Supplemental accident insurance, on the other hand, is designed to help you cover out of pocket costs associated with accidental injuries.
Although your health insurance will typically cover a good portion of your medical costs, it doesn’t cover everything. You still will need to pay your deductible and a percentage of the cost on top of that until you reach our out-of-pocket maximum. Another consideration is that health insurance only covers medical expenses, it does not cover bills, or childcare cost. Accident insurance can be used to help cover anything that you need it to so you can put the benefit towards what you need the most.
The benefit period for accident insurance is typically 1 year, you have the ability to renew or cancel your coverage each year. All limits apply to single accident events, meaning that there is no yearly maximum for accident insurance.
Accident insurance is considered gap coverage, so it is designed to work alongside your health insurance, not to replace it.
What is the difference between health insurance and accident insurance?
Your health insurance is typically designed to cover all aspects of your personal health. Health insurance covers sicknesses, diseases, injuries, and even mental health issues. Often times these plans come with high deductibles and out-of-pocket maximums. With its comprehensive coverage, typically health insurance also has a higher premium than accident insurance. Your health care coverage has high deductibles because it is designed to be catastrophic coverage, you only really use it if you are experiencing health issues.
Although health insurance typically covers all health-related issues, it can still be unaffordable when a health issue arises. With accident insurance, you can help fill in the gap between what health insurance covers and what it does not. There are some common differences between health insurance and accident insurance:
Deductibles – typically for accident insurance there is a $0 deductible. Meaning that you pay nothing out of pocket if you are injured as a result of an accident. Health insurance has an average deductible of $1,655.²
Premiums – accident insurance is typically offered at a lower monthly premium than comprehensive health insurance.
Coverage – Comprehensive health insurance typically covers all medically related health issues whereas accident insurance only provides coverage in situations that occur as a result of an unforeseen qualified accident.
Benefit – Accident insurance pays your benefit directly to you and you have the ability to use it on any expenses that you would like. Health insurance benefits are paid directly to the company that is providing you treatment and can only be used for medically related issues.
Voluntary accident insurance vs personal accident insurance
Voluntary accident insurance is a group insurance plan that is offered through an employer and can be a good way to offer more benefits with no added cost to the employer. If an employee wishes to participate in the voluntary accident insurance the premiums are simply deducted from their paycheck via payroll deduction.
As a group plan, voluntary accident insurance is able to be purchased at a more affordable rate than personal accident insurance on its own even though the two may offer the same level of coverage. With group plans all members of the group share the cost of the plan, effectively lowering the cost.³
Personal or individual accident insurance, on the other hand, is coverage that you pay for on your own. It is not offered by your employer and as such the rates are typically higher than comparable voluntary accident insurance rates. Self-employed people don’t have the ability to buy through an employer, for these people personal accident insurance can help provide supplemental coverage. Although you might pay a bit more for individual accident insurance on your own when compared with an employer sponsored plan, it is still a good way to help lower the overall out of pocket cost of medical treatment if you accidentally get injured.
How can I use the payout money from an accident insurance claim?
If you do suffer an accidental injury that is covered by your supplemental plan your benefit is sent directly to you to spend however you choose. This one of the biggest benefits of having an accident insurance plan, it helps you cover expenses that might arise if you have to miss work or if you cannot fulfill your typical role in your family. You can apply the payout money wherever it makes the most sense to you and your family including but not limited to:
Expenses that healthcare doesn’t cover
There are some limitations to which types of injuries are covered by accident insurance. Accident benefits are only paid out in case of a qualified accident under your policy, if your injury is the result of an illness or chronic condition, then accident insurance will typically not provide coverage. There are a few other common situations in which you cannot receive an accident benefit:
High-risk recreational sports injuries (including, skiing, scuba diving, bungee jumping, etc.)
Injuries caused by dangerous or reckless activities
Self-inflicted injuries, including suicide
Injuries that occur while under the influence of drugs or alcohol
Injuries incurred while committing a crime
Injuries incurred prior to purchasing accident insurance
Injuries in sports are common and unexpected, especially in children. Over 3.5 million children aged 5 to 14 are injured each year playing sports.⁴ If your child plays a sport it is a good idea to think about accident insurance coverage. When you child gets injured, there is a high likelihood that you will need to stay home as a caretaker. This can lead to lost wages making it difficult to make ends meet. You do not want to be in a situation where you are choosing between caring for your child and going to work. Accident insurance can help fill this financial gap for you.
Rehabilitation Treatment & Accident Insurance Quotes
Injury treatment may not end when you get your cast off or are able to walk without crutches, physical therapy and rehabilitation are typically a key component to returning to your normal livelihood. Rehabilitations services such as physical therapy are typically covered, in part, with accident insurance. Although accident insurance does provide a benefit for rehabilitation treatment and other related treatments it does so for a limited number of sessions and a short amount of time.
If you are looking for more information on Accident Insurance, Guardian Direct® has many resources that you can use to help make an informed decision. Whenever you are making a choice regarding your family’s health and finances it is important to have all of the facts. That is why we have provided you with a robust database of tips, insights, and frequently asked questions to help you make the best choice for your family.
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https://www.cdc.gov/nchs/fastats/emergency-department.htm, (2021) accessed 3/5/2021
https://www.fool.com/retirement/2019/10/21/heres-what-the-average-health-insurance-deductible.aspx, (2019) accessed 3/5/2021
https://www.healthinsurance.org/glossary/voluntary-accident-insurance/ last accessed 3/5/2021
https://www.stanfordchildrens.org/en/topic/default?id=sports-injury-statistics-90-P02787, accessed 3/5/2021
Brought to you by The Guardian Life Insurance Company of America (Guardian), New York, NY. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, investment or medical advice.(exp.05/22)