Accident Policies

Health Insurance Accident Policies

Some policies cover only accidents and not illness. As you might imagine, policies like this are very specific about what is considered an accident. It is important to understand what is defined as an accident as it pertains to the health insurance industry . . . an accident is an event that is unforeseen and unintended.

Keep in mind that any discussion of this type of policy also applies to any type of policy that includes accidental coverage not just accident specific policies.

Accident benefits are most commonly paid for accidental loss of life (also called accidental death), accidental loss of limb or sight (dismemberment), loss of time and/or income, hospital expenses, surgical expenses, and medical expenses like visits to the doctor.

Let’s expand a bit on dismemberment. As we said, this would be loss of limb or sight, however, different states have statutes that define dismemberment and they can vary from state to state. This is a subject that you need to discuss with your insurance agent to determine what actually constitutes dismemberment in your state.

Accidental Death Benefit can also be referred to as “principal sum.” This type of coverage should not be confused with life insurance. There is a world of difference between the two.

Life insurance policies will generally regardless of the cause of death. An accidental benefit is paid ONLY if the death is accidental as opposed to a death by natural causes or illness. The person who received the death benefit is called the beneficiary.

The policy owner has the right and responsibility of naming beneficiaries. Usually there is a primary beneficiary however he/she can assign a second and even a third beneficiary. The primary beneficiary is the first person in line to receive the benefit in the event of the death of the policy holder.

They can also name a second beneficiary who would receive the benefit in the event the primary beneficiary dies before the insured. Some policies can include a third beneficiary who would be in line after the first two.

There is much more to be learned about accidental death policies, but we would like to mention one important element before we move on. An accidental death may not be instant. A person can die as a result of an accidental injury months after the accident occurrence.

Read your policy carefully because most stipulate that the accidental death benefit will only be paid if death occurs within three months of the accident.

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