The Plan B for when you're not eligible for Plan A — the next best thing to reduce your risks
Accidents change everything.
They can suddenly wipe out your ability to earn an income, endanger your family's stability and alter your confidence for the future.
It's not uncommon for accidents to become the start of unexpected financial stress that can change your way of life. They can push you into more debt to pay for unexpected medical procedures, drain your cashflow and can even force you to sell off investments or assets to cover debts, at the worst possible time.
The last thing on anybody's mind should be money and returning to work.
What to do when you don't qualify for comprehensive insurance cover?
For many people, a surprise major medical bill or the sudden loss of their income is understandably overwhelming.
- But if you don't qualify for this type of comprehensive insurance cover, the next best option may be Accident Only Insurances.
These types of specialist policies are designed to help people who, for a variety of reasons may not be eligible to qualify for comprehensive insurance cover, but who still have financial needs to protect and families to keep safe. These policies are not suitable for a DIY approach so be sure to get professional financial advice about your situation.
No one's immune from life-changing accidents that can remove their earning capacity and destabilize the financial security of their family.
Types of Accident Only Insurances
Accident Only Insurances are the next level of personal insurance policy designed to protect against the financial impact of an unexpected accident - whether that involves a Long term Disability, Loss of Income, or even an unexpected Death, as defined in the policy.
- Accident Only Insurance cover as the name suggests pays a benefit in the event of an accident occurring and you needing to claim.
- Accident Only Insurance cover can be a helpful part of your protection strategy when you simply don't yet qualify for comprehensive insurance coverage but still need some level of cover to reduce your risks.
When you may need an Accident Only Insurance option
There are times when you may not be eligible for a comprehensive life insurance policy, but you still need protection.
This could be for:
- temporary reasons - while you recover from an existing injury or complete planned surgery or therapies, or
- ongoing reasons - due to a previous or permanent health issue or even your type of occupation.
There are different grades of Accident Only Insurance cover, all with varying levels of medical assessment and they can become a practical alternative if your current health or occupation makes getting comprehensive cover unavailable.
Meet Ramesh. He's positive, energetic and living with a genetic kidney disease. An experienced software coder, he relies upon his ability to type code and to use design software tools.
As a teenager, Ramesh found out he had inherited Polycystic Kidney Disease and later he received a successful kidney transplant from a sibling.
As part of his healthy (and some would say overactive) lifestyle he's now become a keen cyclist later in life. He's part of a social bike club that does long rides on weekends and he finds it helps him clear his head and unplug from his online work life.
- Ramesh was unable to qualify for comprehensive Income Protection or Disability Insurance cover due to his Polycystic Kidney Disease.
- So he decided to take out the next best option of Accident Only Income Protection and Accident Only Total & Permanent Disability Insurance.
- His Accident Only Income Protection cover can pay up to 75% of his income (and 100% of his employer's Super contribution) on a claim while he recovers.
During a recent club group ride, a car failed to stop at a red light and collided with three of the lead bikes, knocking Ramesh off his bike into the gravel on the roadside, breaking both his wrists and three fingers.
There is a lot of rehabilitation ahead and doctors are not sure if he'll recover full use of his wrists and hands. It's early days in recovery yet, and Ramesh is undergoing extensive hand and wrist rehabilitation.
Lots of questions about his future race through his mind daily - but financial security is not one of them.
His Accident Only Income Protection now pays him a monthly income which means he can still pay the mortgage and meet family living expenses.
If he does face the possibility of a long-term disability, Ramesh's Accident Only Total & Permanent Disability cover will pay him $2,000,000 in a lump sum if doesn't recover the full use of his wrists and hands and he has to adjust to living with a permanent disability unable to return to work in his current job.
Who this is especially relevant for?
Many people for very different reasons simply do not qualify (or don't yet qualify) for a comprehensive insurance policy to protect themselves or their families, but still need an insurance alternative.
This is especially relevant for people with:
- a complex medical history - like leukemia
- a very recent medical procedure where the long-term outcomes are not yet known - like very recent gastric banding, very recent mental health support, and organ transplant recipients
- difficult to manage medical conditions - where the risk of ongoing management makes them commercially uninsurable - like Dysplastic Nevus Syndrome where a person can have so many moles on their skin, the risk of missing one during a routine examination for melanoma is overly high
- family genetic conditions where the statically increased risks make them not commercially viable for comprehensive insurance cover
- high risk occupations - like Crane Drivers, Tree Loppers, High Voltage Linesmen and frontline Emergency Services workers
- self employed occupations with very long hours who don't qualify for comprehensive insurance cover or
- who want to minimise their out of pocket expenses in the event of a workplace accident occurring
Whatever the reason, an Accident Only Insurance policy can be the next best thing (when you don’t qualify for the best thing) and you can still protect yourself from the financial effects of accidental death, disability or loss of income an accident can create.
What types of Accident Only insurances are available?
There are three main types of accident only covers usually available:
- Accident Total & Permanent Disability (ATPD) - pays a lump sum benefit if you are totally and permanently disabled as a result of an accident. There are different types of cover from any occupation or the higher grade own occupation category of claim, and even special definitions to help protect your non-working partner too.
- Accident Income Protection (AIP) - pays up to 75% of your income per month (and can reimburse your employer’s super contributions too) if you’re working and totally or partially disabled as a result of an accident.
- Accidental Death (AD) - pay a lump sum of money if you died from an unexpected and unintentional accident.
Pro Tip: Only a small number of insurers offer this type of specialist cover. Like all specialist insurance cover, this is not suitable for a DIY approach or a simplified online comparison service. Get professional advice from the risk insurance specialists at Unusual Risks Insured.
Questions people ask about Accident Only life insurances
Take a look at some quick questions people ask about Accident Only protection insurance.
Accident Only Life Insurances 101
What is it?
Simply put, insurance to protect you from the unexpected.
Accident Only Insurance policies can form part of a strategy when you don't qualify for a comprehensive insurance cover and you still need some level of cover to reduce your financial risks. Accident Only insurance cover as the name suggests pays a benefit in the event of an accident occurring, as defined in the policy.How does this type of insurance help you?
Accident Only insurances are different to the comprehensive cover that also protects against death, disability and illness due to medical conditions such as cancer, heart disease and stroke.
If you don't qualify for comprehensive insurance cover, an accident only policy may be the next best thing.
Where to now?