Scheduled Benefit Accident Plans
Accident plans vary, and typically fall into one of two major categories. The first type of accident plan uses a scheduled benefit system. This means that every medical expenditure, whether it’s a broken arm or a flu shot, has a set price. For instance, the insurer may only pay out $400 if you break your arm, regardless if the bill is $3,000. The set price is $400 so that’s what the insurer pays. The price also depends on the bone you break. If you cut yourself, the length and depth of the cut, as well as how many stitches, if any, are required, factor into the pricing. Several variables play a part in determining the amount the insurer will pay out. Because the prices are fixed, there’s not really a maximum benefit.
Under scheduled benefits, there are plans that cover 24/7 while others don’t. Some group accident plans only cover accidents that occur during work. Additionally, there are accident plans that coordinate benefits. So when you meet your out-of-pocket maximum on your health plan, the accident plan does not pay out anything. On the other hand, non-coordinating benefit plans pay out the full benefit regardless if your health plan covers 100% or not.
Lump Sum Accident Plans
Then, there’s the lump sum accident plan. These plans range anywhere from $1,000 maximum benefit to a $25,000 maximum paid within a year. For example, let’s say you underwent surgery for a broken leg and the medical bill is $15,000. If you have a $15,000 benefit, then the insurer will cover the entire bill in effect maxing out your plan’s coverage for that year. In other words, the plan pays out until you’ve reached the maximum.
In conjunction with the maximum benefit, lump sum plans typically have a $100, $250, or up to a $500 deductible before they start paying out. In some cases, the plans coordinate benefits with your health plan. Then, there are lump sum accident plans that don’t coordinate benefits, and those are the ideal plans. The best option for the most part is a zero deductible, lump sum accident plan that doesn’t coordinate benefits.
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