Bowtie: How is accident defined? How different is accident insurance from medical insurance?
Product Development: Accident insurance protects against injuries caused by accidents and pays out in the form of either a lump-sum amount, reimbursements for medical expenses or weekly compensation.
The main difference between accident insurance and medical insurance is the cause for compensation. If an injury is caused by natural illness such as cancer and requires medical treatment, or a medical examination such as gastroscopy for diagnosis, then medical insurance will cover the expenses. However, accident insurance will not.
|Cause||Medical Insurance||Accident Insurance|
|Bone-setting treatment for sprained ankle caused from running||?*||✓|
|Hospitalization due to injury from a traffic accident||✓||✓|
|Gastroscopy to investigate cause of prolonged stomach pain||✓||X|
|Surgery for colorectal cancer||✓||X|
Bowtie: Can everyone get accident insurance?
Product Development: Most insurance companies set an age limit for accident insurance, accepting applicants only between 18 to 60 years of age. Some insurers have broadened the age limit to 15 to 70 years of age.
Some have no age limits but offer different coverage and benefits based on the insured’s age. Therefore, elders and children should pay close attention to the detailed terms.
Since accident insurance doesn’t cover illnesses, the underwriting process is simpler. Sometimes, health information from the insured is not even required. However, insurers would approve or reject the application based on applicant’s occupation because certain occupations are at high risk of accidents.
Most insurers have a list of “uninsured occupations” which include professional drivers, construction workers, high-altitude workers, athletes, and jockeys. Government forces may be uninsured in some cases as well.
Bowtir: Does accident insurance cover bone-setting and medical expenses?
Product Development: Generally, accident insurance can be divided into three categories:
|“All-in-one” Accident Insurance (Death + Disability + Medical + Hospital Cash)||Medical Reimbursement Accident Insurance||Lump-sum Benefit Accident Insurance|
|Lump-sum payment for death or disability benefit||$$$||$ / X||$$$|
|Reimbursement for medical expenses||$||$$$||$ / X|
According to market data, most companies offer “all-in-one” accident insurance which includes a lump-sum payment for death benefit as well as basic bone-setting and physiotherapy treatments. Some insurers offer $100 only per day and do not cover outpatient treatments.
As for hospitalization, some insurers offer daily allowance between $400 to $2,000. Accident insurance with medical protection will cover medical fees such as examination or surgery on a reimbursement basis.
Some companies offer lump-sum payment for death or serious injuries only and do not cover expenses for hospitalization, bone-setting or outpatient treatments.
All in all, we believe “medical protection” is a major consideration when purchasing accident insurance, as long-term treatment or rehabilitation and care are needed for most injuries from accidents while the probability of death or disability is relatively low.
Bowtie: Does accident insurance have worldwide coverage?
Product Development: Not all accident insurance covers international regions. Some insurers specify a list of covered geographic areas such as Europe or Southeast Asia. However, not all insurers publish this in the policy terms and conditions, so it is important to double check before insuring.
Bowtie:What are the common excluded items?
Product Development: :In addition to illnesses, the most common exclusions are suicide, illegal activities, wars, riots and military service, etc. And apart from commercial flights, most accident insurance does not cover air travel such as private planes.
Bowtie: How are coverage and premiums determined?
Product Development: Different insurance companies use different pricing methods for premiums. Some insurers set the premiums based on age groups. For example, there is a set premium for ages 10 to 17 and another for ages 18 to 40.
Some insurers price premiums based on the coverage. More coverage means higher premiums. And there are some insurers that consider all factors before providing a quote, including the insured’s age, occupation and associated risks.