My bank is offering me this insurance policy that protects me in case I'm hospitalized because of an accident. They call it "accident care" insurance. The way it works is that I pay a monthly premium of about $11, and if I have to spend time in a hospital because of an accident, they'll pay me $200 for every day I spend there. For example, if I break my leg because of a car accident or fall, and if I spend five days in the hospital because of it, I'll get paid $1000($200 for each day).

I was just wondering if I should sign up for this policy or not? How many other people have this kind of insurance? Is it a necessity like car or home insurance? Is the $11 monthly premium worth it?

My bank is offering me this insurance policy that protects me in case I'm hospitalized because of an accident. They call it "accident care" insurance. The way it works is that I pay a monthly premium of about $11, and if I have to spend time in a hospital because of an accident, they'll pay me $200 for every day I spend there. For example, if I break my leg because of a car accident or fall, and if I spend five days in the hospital because of it, I'll get paid $1000($200 for each day).

I was just wondering if I should sign up for this policy or not? How many other people have this kind of insurance? Is it a necessity like car or home insurance? Is the $11 monthly premium worth it?
It is set up for only the time spent in hospital, is there any cover for time of work?

It is set up for only the time spent in hospital, is there any cover for time of work?


It only covers time spent in hospital.

It only covers time spent in hospital.
It can be worth it, but sometime of illness will still be spent at home.

What other terms apply? 

Is there a time limit?  What if you are hospitalized indefinitely (like in a coma)? 

I'm sure the money is considered taxable income and that you must claim it. 

What restrictions, if any, are put on long-term disability compensation as a result of receiving this income?

Does your claim to Claims Direct affect the final payout?

Are you accident prone?  Have you had many accidents in your lifetime?

Does it pay if you are in the hospital for illness (not accident)?

If it doesn't pay for hospitalization due to illness, I, personally, think it is a waste of money.  You are paying them $11 a month on the off-chance you will get hospitalized for an accident, which the odds are you are not going to have.

Just my opinion.

If it is only hospital I would say no.  Make sure you read closely, alot of policies like that have a waiting period before they kick in.  There are great policies out there that cover hospital and both long and short term disability.  They also have policies that pay a flat fee for a broken bone, etc.  When I broke my ankle and couldn't work for 6 weeks, it was a life saver.  Disability/accident insurance is in general a great idea, just research what you are getting.

Who is the insurance provider?  A bank cannot offer insurance without the cooperation of an insurance company.  Why is it only for accidents and not hospitalization over all.  What if the bank goes under or is bought out by a larger bank? 

It's also worth checking the small print over what illnesses they cover. Some of these policies suddenly don't cover you at all when it is a serious long term illness ........

NO!

Well, I decided to decline the offer and not sign up for the policy.




Does it pay if you are in the hospital for illness (not accident)?


No, the policy only covers hospitalization for accidents, not illness. And it only covers time spent in the hospital, itself.

Well, I decided to decline the offer and not sign up for the policy.



No, the policy only covers hospitalization for accidents, not illness. And it only covers time spent in the hospital, itself.
It is not worth the paper it is written on.

My bank is offering me this insurance policy


You can stop there.  It's not a good deal.  If it's not a banking product, your bank's only offering it because some other company (like this insurance company) has paid the bank to advertise on its behalf.  "Why wouldn't you do business with Dewey Cheatem and Howe insurance?  Your own bank thinks it's a wonderful company!" is a huge red flag.

Now to analyze the offer more properly (and to echo what others have said):


They call it "accident care" insurance. The way it works is that I pay a monthly premium of about $11, and if I have to spend time in a hospital because of an accident, they'll pay me $200 for every day I spend there.


$11/month is $132/year. 
You can currently make around 4% risk-free by buying CDs.
In order to pay for that insurance, you've gotta have $3300 saved up.  ($3300 * 0.04 = $132).

As others have pointed out, $200/d in the hospital isn't gonna cover you much.  For most breaks, you might spend a day or two, tops, in the hospital.  You won't be walking out, you'll be on crutches for a week or two, you'll have dozens of doctor visits, but you're only gonna be in the hospital collecting that $200/day for a couple of days.  (That's actually a good thing -- hospitals are loaded with nasty germs from all the sick people, so the sooner they can kick you out on the street, the better your outcome, and it saves them a few bucks too!)

Let's assume the worst-case scenario -- you're in the hospital for a week.  You've tied up ($132*25) $3300 of your capital for the rest of your life (even if you don't have that much cash today, you're paying $11/month as if you had a $3300 interest-only mortgage at 5%)  in something that can, at best, pay you $1400 every time you break your leg.

On top of this is probably around $10000-20000 of costs that aren't covered by this "insurance".  A grand for a 15-minute ambulance ride (you're not walking to the hospital on that leg!), a few grand for anasthesia (unless you're really into pain when they set that bone), a few more grand for physiotherapy (or do you want to walk funny the rest of your life), a couple thousand for follow-up appointments, and, oh, at least $10K for the actual surgery where they carve ya open, screw the plates to the bone fragments, and piece things back together.  (Remember, we're talking the worst case here, the one that keeps you in the hospital for a whole $1400 week, because a simple break might only get you $200 for that one-night stay in the hospital, even though it leaves you with a relatively cheap $5-10K medical bill :)

Last, but not least, I'll bet there's a clause in the "insurance" policy that says something to the effect of "we don't have to pay if the guy's got other insurance coverage".  So you might not even get your $200/night because it's covered by some other policy!

You see where I'm going with this.  If you've already got good medical insurance and are in the habit of breaking your leg every two or three years... well, I feel sorry for both you and your insurance company, but this might be a good deal for you because you're spending a lot of time in the hospital.  If you've got no insurance and know a hospital that'll put you up for less than $200/night for a week or two out of every year, well, I feel sorry for you (a 5-star hotel is cheaper and way nicer!), and if you can convince these guys to pay up, you might come out ahead.

Insurance is, by definition, a sucker's bet.  If insurance companies couldn't make more by investing their clients' premiums than they pay out in claims, they'd all be bankrupt.  For an individual, however, you just might be that "lucky" guy who gets that $1M case of cancer the week after you pay your first $100 monthly premium. 

I'm fortunate in that I have good employer-paid health insurance, but over the past 20 years, considering the $thousands per year that my employer pays in premiums, I've actually used less than $500/year (doctors' visits, tests, prescriptions, everything!) in actual services.  If I'd been able to sock those $thousands into a health savings account during those years, I'd be able to afford the same high standard of care well into my old age.

Insurance offered through a third party is always a sucker's bet.  It's almost always as close to fraud as can be legally made possible, and you'll almost certainly do better by putting your $11/month in the piggy bank.  Is this particular deal a good one?  Not just no -- hell no.

Other than that, start your own Insurance Company?

Other than that, start your own Insurance Company?


Karma -- you may have been joking, but it's really as easy as that.

1) Get a quote from someone else's insurance company.
2) Don't sign up for insurance.
3) Take the premium that the insurance company wanted to charge you, and deposit it into an interest-bearing savings account.
4) Don't withdraw from that account unless you'd have wanted to make a claim.

That's exactly what the insurance companies do, and they make money off it.  If the odds weren't in your favor, the insurance companies (which spends billions of dollars figuring out what the odds are, so that it can charge you enough premiums that the odds are always in the insurancy company's favor) would be bankrupt.  Why not roll the dice? 

Jello Biafra once said: "Don't hate the media, be the media". 

Same deal with insurance.  You've gotta gamble with your life no matter what you do; if you can't beat the house, be the house.