Accident
insurance will not only cover John's hospitalization expenses, but
if he happens to be the sole breadwinner for the family, will also
provide his family members with a means of income to last them throughout
the period of his downtime. If he is lying in bed recovering from
a work related accident, John obviously cannot work and bring home
the money. But this does not mean that his family has to starve.
Accident insurance will provide them with the means to carry on
while John recovers.
And by enrolling in
an accident insurance plan that covers all their employees, the
employer too is spared of the burden of footing big bills and emergency
payments. So, does this mean that the insurance company suffers
in the short and long term? Not really. You see, enrolling in an
accident insurance plan means that the company or the insured individual
pays a weekly, monthly, quarterly or even annual premium to the
company. This is either a fixed amount or a variable amount based
on the kind of accident insurance plan chosen. If all is well and
nothing happens, the company keeps the premium. But if something
unfortunate should happen, the company may make a payout on one
premium. The law of averages ensures that not all policy holders
will have accidents at the same time or even once during their coverage.
It is an educated risk that the insurance company takes.
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