Accidental Insurance Plans — Accidental Plans, Coverage & Quotes
If you have a family, you realize how important it is to take care of them. Accident insurance provides a lump sum to your family after your death, if it results from an accident. Accident insurance policies are stricter and more limited than standard life insurance policies, but they have larger cash values relative to their cost. How is this possible? The accident insurance company only provides a payout to your family if your death is directly or indirectly caused by an accident (e.g. a car or plane crash), as opposed to medical problems. Statistics show that the majority of people pass away due to illness, so accident insurance plans are able to profit off of this bet. Since most family accident insurance is sold to cover a specific period of time, there is also the chance that many people outlive their policy. Accidental insurance is available by itself, or as a rider attached to a family health insurance or life insurance policy.
There are two types of accident insurance: Accidental Death and Accidental Death and Dismemberment (AD&D). As its name implies, accidental death insurance pays out a lump sum to your family upon your passing. That payout is usually several times larger than that of a standard life insurance policy. An unexpected death can be even more difficult for your family, financially as well as emotionally. Accidental death plans can help your family pay for sudden funeral expenses, or emergency medical costs associated with the accident before the policyholder died.
AD&D insurance, on the other hand, is more comprehensive. Just like accidental death, it pays out upon the policyholder’s death for quality reasons. The difference is that accidental death and dismemberment policies also provide income in the event of a severe, non-fatal injury resulting from a qualifying accident. Depending on the injury, the policy may give your family a partial cash value or the entire cash value of the AD&D policy, depending on the injury’s severity. Dismemberment (loss of the limb, hand, foot, or sight) is the primary condition eligible for a payout. Your family will receive a portion of the policy’s value if you lose one of the qualifying appendages; for example, if you go blind in one eye as a result of the accident. If you are dismembered in two or more areas (i.e., become completely blind in both eyes), the full cash value of the policy will be paid out. This financial security is useful to your family, because it will provide them while you are out of work, in addition to the cost of your future health care.
What is normally excluded from accident insurance? It varies among insurance companies. Some cover a wider variety of conditions and incidents, but this increased leniency could mean higher accident insurance premiums. The expanded coverage of accidental death and dismemberment policies means that they are more costly than those policies that only cover accidental death. Deaths or injuries resulting from physical or mental illness (including surgical errors) are not covered by most accidental insurance companies; this is because they are relatively common causes of death. Regular life insurance policies are more appropriate for those conditions. Like most standard life insurance companies, they will also refuse to pay out a claim associated with the policyholder’s illegal activity or suicide. This is why it is very important that you are clear on what is covered prior to buying accident insurance.
VitalOne has licensed insurance agents who can provide you with accidental insurance quotes and help you compare accident insurance plans. They can help you determine whether an accidental death or AD&D policy is the best choice for you and your loved ones.