It is a type of insurance where the policyholder is paid a lump-sum amount of money in the event of an accident. This amount is meant to cover the expenses incurred as a result of the accident.
Accident Insurance Details
The lump-sum amount of money received as part of the accident insurance helps the insured pay for medical bills and other expenses. These expenses include emergency treatment, hospitality services, medical exams and checkups, medicines, and other transportation and lodging expenses.
An accident insurance policyholder is required to pay a premium every month for the duration of the policy. The insurance company credits a lump-sum amount to the insured on the maturity of the insurance. Accident insurance covers injuries such as fractures, dislocation, paralysis, etc. In an accidental death to the insured, a lump-sum amount is sent out to a designated beneficiary. This beneficiary is selected by the insured.
Accidental insurance providers have a set of terms and conditions that contain a list of circumstances or events that can void the insurer's right to the insured payout sum. The accidental insurance policy does not cover injuries sustained by the insured while committing an illegal act.
Real-World Example of Accident Insurance
Combined Insurance Company of America is one of the leading accident insurance policy providers in the United States. This organization was founded in 1922, making it one of the oldest insurance providers in the world. The company offers personal accident insurance under its Accident Protector policy.
Combined Insurance Company provides four different types of coverage. These include individual, family, individual and children, and individual and spouse.
The insurance benefits are provided directly to the insured and not to any medical facility. The policies offered by Combined Insurance Company are valid 24/7 and covers accidents that occur during any event at any time and any place. Combined Insurance Company also provides a combo accident and sickness plan covering the costs of any accidents and any sickness incurred due to this accident.
Types of Accident Insurance
Death and Dismemberment: Accidental death and dismemberment insurance is one of the critical types of accident insurance. It provides relief to the family of the insured in the event of death caused by accident. The policy pays the insured's family in a lump-sum amount or as a premium every month, depending on the insurance.
General Accident Insurance: A general accident insurance policy covers events that are not limited to the policy holder's death or dismemberment. These policies provide a lump-sum amount of money to the insured to cover the accident's expenses.
Disability Insurance: Employers generally provide this type of insurance in an organization. Disability insurance covers any accident suffered by the employee during work that prevents him from continuing to work. This insurance provides relief to the employee's family, who might not be fit enough to continue working. The family of the insured receives payments depending on the type of the policy. The payments are usually made at the end of each month for the policy's or the disability's duration.
Accident Insurance vs. Health Insurance
A health insurance policy covers the overall health of the insured. The health insurance policy provider will examine the insured's medical health and history to understand the risk involved. A health insurance policy covers the overall health and the expenses incurred due to a deterioration of the insured's heath.
On the other hand, accident insurance covers the medical and hospital expenses incurred due to an accident. Such insurance policies are not intended to replace the overall health insurance policy and can be viewed as a subset of, and complement to, the health insurance policy. Under accidental insurance, the insured gets complete coverage against any injury or wound sustained due to a covered accident.