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Accident Insurance: Is it Really Necessary?

Accident Insurance

If someone suffers an injury like a broken leg, it's reasonable for them to assume their major medical insurance will cover the costs for treatment and recovery. That's why we have insurance in the first place, right?

Woman buckling in child.

However, many are finding that when an illness or accidental injury occurs, major medical insurance coverage can fall short. In fact, 42% of Americans find medical expenses to be a serious problem and spend "all or most of their savings on large medical bills" (source: Robert Wood Johnson Foundation national poll).

That's because most major medical insurance plans only pay a portion of bills, leaving insureds to cover the remainder themselves. But there is another option. Accident insurance exists as an add-on to major medical insurance to help people fill financial gaps and get the care they need after an accident.

Accident insurance typically covers hospital stays, emergency room visits, intensive care, ambulance rides, broken bones, physical therapy and a variety of other benefits. Depending on the policy selected, accident insurance may help cover injuries sustained off the job (non-occupational) or both on and off the job (24-hour).

Unlike medical insurance, cash benefits from accident insurance are paid directly to the insured, not to doctors or hospitals. The cash can be used for deductibles, treatment or travel. It can even go toward monthly bills like mortgage or rent, utilities, childcare or groceries. This is especially helpful for those unable to work due to their injury.

Nevertheless, the assumption remains that people are fully covered by their health insurance policy alone. A look at the costs of an accidental injury shows how far this is from the truth.

Medical expenses for a broken leg in the U.S. average $10,000 (source: Healthcare Bluebook). After health plan deductibles and co-insurance (out-of-pocket costs charged after the deductible is met), major health coverage often dries up and policyholders are left to pay almost 40% of that total from personal savings­.

An extra $3,875 in savings isn't something people just keep laying around. So, accident insurance pays a cash benefit to help cover this remainder. In fact, it can often pay over and above the required medical costs, leaving a surplus of cash the policyholder can spend however they like.

Accident infographic.

Value-Added Features of Accident Insurance

Cash benefits aren't the only advantage of accident insurance. Flexible and inclusive features make getting and keeping the coverage easy for employees and their dependents.

For example, coverage is typically Guaranteed Issue (no required medical exam, subject to exclusions and limitations) and portable so insureds can keep their accident insurance even after they leave the employer that offered the coverage.

As the Finnish proverb goes, "An accident won't arrive with a bell on its neck." We never expect them until they happen and it's too easy to be left with extra medical bills after insurance runs out. Accident insurance offers the help people need to recover physically as well as financially and get back to everyday life.

Allstate Benefits offers Accident Insurance to protect our customers' finances against life's unpredictable—and expensive—slips and falls. Learn more about Accident Insurance here.

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