Health insurance is meant to protect against losing your job and having to pay for medical care out of your own pocket. There are two main types of health insurance policies: those that pay out if you get sick or hurt and those that pay for medical costs.
Policies for disability income are also called loss of income, loss of time, and replacement income. If an insured person gets sick or hurt and can't work anymore, this type of policy will pay them benefits. Depending on the policy, payments can be made once a week or once a month.
There is a wide range of coverage in medical expense policies, from very little to full packages with multiple coverage. Some policies cover both accidents and illnesses, different hospital costs, and other costs related to medical care. These include accident and illness policies, hospital-stay policies, basic medical expense policies, and major medical expense policies.
Any of these policies could cover some or all of the above, and you could get the money all at once.
Some insurance policies only cover accidents, not illnesses. As you might expect, this kind of policy is very clear about what counts as an accident.
It is important to know what an accident is in the health insurance industry. An accident is an event that was not planned and did not happen as planned.
Keep in mind that anything you read about this type of policy applies to any policy that covers accidents, not just policies that are made for accidents.
Accident benefits are usually paid when someone dies by accident (also called "accidental death"), loses a limb or sight by accident (called "dismemberment"), loses time and/or money, has to pay for a hospital stay, surgery, or other medical costs, like trips to the doctor.
"Principal sum" is another way to say "accidental death benefit." This kind of insurance is not the same as life insurance. There is a huge difference between the two. Most life insurance policies will pay out no matter what caused the death. A death benefit is only paid if the death was caused by an accident, not by illness or natural causes.
The beneficiary is the person who gets the money from the death benefit. The person who owns the policy has the right and the duty to name beneficiaries. Most of the time, there is one main beneficiary, but that person can also name a second and even a third.
The primary beneficiary is the first person in line to get the benefit if the policy holder dies. The person who owns the policy can also name a second beneficiary who would get the benefit if the first beneficiary died before the insured. Some policies can have a third person who gets the money after the first two.
Another important thing to know about accident policies is that a death caused by an accident may not happen right away. A person can die from an injury they got in an accident even months after it happened. Read your policy carefully, because most say that the accidental death benefit will only be paid if you die within three months of the accident.
