Accident Insurance, as the name implies, is the term used to define insurance coverage in the event a individual dies from “accidental” causes. Accidental deaths usually apply to the following, a car accident, a plane crash, a train wreck, a shipwreck, a ski-accident, a fight with your power tools that you lose, a helicopter crash, a kayaking mishap, and any number of activities that could result in death or dismemberment.
Accident Insurance is offered through a number of channels; your personal or business credit cards, work insurance, major department stores, and any financial service company in the business of dealing with the retail consumer. Since we are all retail consumers on some level or another, this type of insurance is available to anyone.
Some policies are designed to pay a benefit amount for loss of limb or disability as a result of an individual experiencing an accident. Usually, the amounts can vary from $1000-$1,000,000, as many of you probably heard about Jennifer Lopez’s infamous insurance of her rear. Most credit cards will offer “travel protection” for cardholders who frequently fly for work or pleasure.
Usually, Accident Insurance does not require proof of insurability or a health exam as the policy is very specific on what claims the insurance company will actually pay. You must die or lose a body part function in a very specific manner to meet the criteria listed in an accident policy. JCPenney used to offer AD&D (Accidental Death and Dismemberment) insurance frequently to their shoppers and for those who chose to purchase the policy, the premiums were generally paid annually with highlights emphasizing the death benefit amount in the millions without the fine print detailing in order to receive the maximum benefit, the individual must die in a Plane crash. There is a 1 in 11 million chance you’ll die in an Airplane crash so the odds are in the insurance company’s favor for not having to pay out the million dollar claim.
Be cautious when purchasing this type of insurance. Marketed to Americans by the large benefit amounts that could be paid out in the event of an accidental death or dismemberment, the public usually overlooks the details within the policy.
If you work in a manufacturing company or if your work requires a high degree of physical activity, the chances you’ll experience an accident while working are much greater than if you work in an office environment. In the case you regularly exert physical labor, you should seriously consider purchasing AD&D if it’s not offered by your employer, but again, usually your employer will offer this type of insurance or at least worker’s compensation.
With anything in life, you get what you pay for, so if it sounds too good to be true, it probably is and so don’t be fooled by high, attention grabbing benefit amounts. Do your homework and assess the chance you’ll die in an accident. Remember, car accidents attribute for approximately 50,000 deaths each year since 1999 and as America’s population nears the 304 Million mark, accidental death, though tragic and heard often in the news, are rather unique events, and you may be throwing your money away by purchasing one of these policies. However, the families who survived 911 are probably thankful if their loved ones carried some type of accident insurance, as long as the insurance company did not contest any of the claims filed or the manner of death.