Accident insurance is a combination of life insurance and medical aid. It pays out in the event that the policyholder suffers personal injury. The policy pays out varying amounts for varying severities of accident. That is, if the policyholder suffers an accident and must be hospitalized, it covers the medical costs. If the policyholder suffers temporary disability, it may cover income for the duration of recover, and in the event of permanent disability, it pays out an even larger amount.
Accident cover also pays out in the event of death by accident. In fact, people who are disqualified from conventional life insurance on the grounds of poor health can take out accident cover as the risk is determined by lifestyle. Although some insurance companies provide accident cover specifically for people with adventurous lifestyles.
Extent of accident cover
Most long-term insurance companies don’t cover negligence. That is, if you could have prevented the accident or were responsible for the accident (instead of it being a matter of chance), then they may repudiate the claim on the grounds of negligence.
Natural disasters are also not covered under a personal accident insurance policy and, depending on the insurer, neither are acts of terrorism. The policy functions in much the same way as a life insurance policy, paying out only in such events where accident could not have been prevented or was not the result a deliberate action.
Accident cover also pays out different amounts for severities of accident. That is, a certain amount will be paid out in the event that the policyholder loses a limb, which is different to the amount that is paid out in the event of permanent functional disability. The policy wording of each will determine the amount paid out in each situation.
Types of accident cover
While a general accident cover will provide coverage for most accidents (other than those already mentioned), there are specific types of cover related to specific risks. Car accident insurance, for example, covers drivers, passengers and third parties in the event of collision. Travel accident insurance can either be taken out by people before they travel or by people in specific industries, such as aviation. Such insurance, however, is costly and requires a specialist underwriter.
Accident insurance, though, is a good idea for anyone who lacks medical cover. It will cover the costs of medical treatment after an accident only (not in the event of a diagnosis of a terminal illness). It is also a good idea for people in high-accident industries and breadwinners as it can provide life cover for families if an accident causes the policyholder’s death.
Life.co.za can source a range of accident cover quotes on your behalf. All you have to do is fill in our online form and an insurance contact will call you shortly.