Let's face it: Most people don't even like saying the words "accidental death and dismemberment."
It brings to mind some pretty terrible thoughts about our own mortality. But just as scary are the challenges–financial, physical and emotional–that can follow an accidental injury. That's why it is crucial to understand exactly what benefits are available through personal accident insurance and how it fits into the overall benefits picture.
It helps to think of AD&D benefits as benefits that bridge an existing gap in insurance. What does that mean exactly? When you think about your health insurance, it provides coverage for medical treatment and services. Your disability insurance provides income replacement should you experience a disabling injury or illness. Life insurance, of course, is available to provide financial support to designated beneficiaries in the event of your death. But personal accident insurance fills in the holes that we might not even realize are there, until it is too late, and it can be paid regardless of any other benefits received.
Here is a hypothetical example, to clarify this point. A 42-year-old male survives an automobile accident, but becomes paralyzed. His health care coverage covers some of his medical costs, and his disability insurance covers a certain percentage of his salary. Accident coverage can fill in the gap left behind after health and disability insurance kicks in. It pays him a lump-sum amount (typically ranging from 50% to 100% of the policy's face value) to cover other expenses associated with his injury. Perhaps his spouse used to stay at home with their children but now needs to work outside of the home, or the claimant used to stay at home with their children. Regardless, this could create a need for child care services, and according to the Child Care Resource & Referral average, annual fees paid for full-time care can range from $3,900-$14,225, and the total can be much higher in some large cities.
Further, in order to provide long-term financial support, the claimant's spouse may need retraining or education. The substantial cost of such training would not be easily absorbed by a budget already stretched thin. Because in addition to expenses already mentioned, it is likely that home and automobile modifications would need to be made to accommodate a paralyzed person.
Accident coverage could potentially pay for all of these expenses in addition to the face value of the policy. For example, in this case, the claimant would receive an additional payout to cover the cost of home modifications. These paid benefits are designed to pay additional benefits to assist families in meeting their other financial obligations, such as a mortgage, credit card debt, medical bills not covered by health insurance, to name a few.
Completing the benefits package
Although accident insurance fills that gap left by other insurance coverage, sometimes it integrates with other benefits to provide a stronger support system when needed most. For example, some accident plans also provide substantial assistance when beneficiaries are faced with the accidental death of a loved one. These services are important to point out because they don't often come to mind when thinking of personal accident coverage. They can include:
Bereavement counseling: Access to free, confidential bereavement services by phone. It also can provide coverage for telephonic appointments with grief counselors and/or face to face counseling sessions. Finally, it connects beneficiaries with local resources in their specific community, like self-help groups, educational programs, non-profit organizations and public resources. In fact, bereavement counselors provide a proactive outreach call to let the employee or beneficiary know exactly what services are available to them.
Legal assistance: Free access to telephonic legal consultation from licensed, practicing attorneys. Such services might also provide referrals to discounted, professional legal services for help with settling an estate, preparing a will, or receiving general legal advice.
Legal and financial guidebooks: In-depth information on probating an estate, investigating additional benefit sources, and financial assessment and planning. This can include sample letters for beneficiaries to use when searching for additional benefit sources.
Expert financial guidance: Free telephonic consultation with financial professionals (including Certified Public Accountants, Certified Financial Planners, Chartered Financial Consultants, Registered Investment Advisors, Chartered Life Underwriters, stockbrokers and personal financial specialists.)
Bank account access to benefits: Arrangements to deposit benefits directly into interest-bearing bank accounts. Such access spares beneficiaries the time they need to deal with more pressing issues while offering the peace of mind that their money is where it should be.
