An accident that injures you will not only rack up medical bills -- some of which your health insurer probably won't cover -- it also could leave you disabled for a period of time and unable to work. Even if you have disability coverage, it won't replace all your lost income, and there likely will be a waiting period. Having accident insurance can come in handy in such a situation.
What is it?
An accident policy is a supplemental form of insurance that will provide a lump sum payment if you are injured by an accident, such as a car accident or a work-related accident. You can buy such policies on the individual market, but they also often are offered as part of a voluntary benefits package through your employer.
Who is it for?
Anyone who would face hardship by being out of work due to an injury from an accident should carry accident coverage. This includes people who are the sole earner in their household and those who are self-employed. It also is a good idea to carry an accident policy if you have a job where on-the-job injuries are a daily risk, such as construction work.
How does it work?
Most accident policies pay you a lump sum if you are injured in an accident. Though you will likely have to show medical proof of your injury to get a payout, there will not be any restrictions on the money you receive, so you can use it not only to pay medical bills, but also for other expenses as well.
Types of policies
Most accident policies are fairly similar, although they can have some subtle differences. Some accident policies also cover certain catastrophic illnesses such as cancer or heart attack.
The main benefit of accident insurance is the potential payment it provides if you are injured. The money can be very important if you can't work because of an accident. Another benefit is that the insurance coverage is very inexpensive, especially if you can get a group rate by getting a policy through your employer.