How accident insurance and AD&D work together after a serious accident

Linda is 62 and lives in Las Vegas with her husband, Ray. She works part time as a bookkeeper for a few small businesses and spends the rest of her week with her grandkids and in her garden. Ray is retired.

Three years ago, at 59, Linda bought her own health insurance and started thinking about what it did not cover. Her health plan had a deductible and out-of-pocket costs she could manage in a normal year. She was less sure about a year with a serious accident in it.

She added Accident ExpenseGuard, an accident plan underwritten by Golden Rule Insurance Company, a UnitedHealthcare company. This story shows how its two benefits, the accidental injury benefit and the accidental death and dismemberment (AD&D) benefit, worked together after a serious accident, and where each one stopped.

What she chose

Accident ExpenseGuard has two parts, and they are tied together.

• An accidental injury benefit. You choose an amount: $5,000, $7,500, $10,000, $15,000 or $20,000. That is the most the plan pays per covered person per calendar year. It starts over each year.
• An AD&D benefit. It is the same amount as the injury benefit you choose. It is a lifetime maximum per covered person, not a yearly one.

Linda covered only herself and chose the $20,000 level. That meant up to $20,000 of accidental injury benefit per calendar year, and an AD&D amount of $20,000 for her lifetime.

She applied in time. At the time of application, the primary insured must be between 18 and 64. Once issued, the policy is renewable until the primary insured’s 70th birthday, subject to its terms, such as paying premiums when due.

The accident

On a Saturday in March, Linda was driving to her daughter’s house for lunch. At an intersection a few miles from home, another car ran a red light and struck the driver’s side of her car.

An ambulance took her to the hospital. Her right leg and foot had been badly crushed. She spent the first days in intensive care. The surgical team operated to try to save her foot, but on the fifth day after the accident, they told Linda and Ray it could not be saved. Her right foot was amputated in a second surgery that day.

She spent nine days in the hospital in all. Ray was with her for most of it.

Linda has since said she does not want the accident to be the main thing people know about her. She is back at her garden, more slowly, and back at her bookkeeping, mostly from home. This story is about the money side of that time, because that is the part a plan like this can help with.

Two benefits from one accident

Accident ExpenseGuard can pay two different benefits after one accident.

The accidental injury benefit pays toward covered medical charges, after the deductible, up to the yearly maximum.

The AD&D benefit pays a percentage of the AD&D amount for death or for specific losses, as long as the death or dismemberment takes place within 30 days of the accident. In some states that window is longer, so check the policy.

The brochure lists the AD&D percentages:

• Death resulting from an accidental injury within 30 days of a covered accident: 100%
• Loss of two or more limbs: 100%
• Loss of two or more hands or feet: 100%
• Loss of one limb: 50%
• Loss of one hand or foot: 50%
• Loss of the thumb and index finger on the same hand: 25%

The AD&D benefit pays in addition to the injury benefit, subject to its lifetime maximum. All benefits are paid to the insured or the beneficiary.

Matching her care to the plan’s time limits

The injury benefit lists covered services with time limits for treatment.

Within 48 hours: burns or lacerations, a diagnosed concussion, an emergency room visit and an urgent care center visit.

Within 30 days: ambulance, labs and X-rays, anesthesia services, MRI or CT scan, doctor visits, prescriptions, fractures, prosthetics, hospital stay or ICU, and surgery.

Linda’s ambulance ride, emergency care, scans, surgeries, anesthesia, ICU and hospital stay, and her first prescriptions all happened within the first two weeks.

The claim

The policy requires notice of claim within 30 days of the date the loss began, or as soon as reasonably possible. While Linda was still in the hospital, Ray gave notice. Later he sent the claim form with the Explanation of Benefits (EOB) from her health plan.

The plan uses the EOB to find the actual charges after the health plan’s adjustments, discounts or allowances. Here is what the EOBs showed:

• Ambulance: $1,450
• Emergency room visit: $2,300
• X-rays and CT scans: $2,600
• Two surgeries: $28,000
• Anesthesia: $3,200
• Hospital stay, including ICU: $41,000
• Prescriptions: $340

Total actual charges after adjustments: $78,890.

The injury benefit, step by step

Step 1. Start with the actual charges: $78,890.

Step 2. Subtract the $250 deductible: $78,890 minus $250 is $78,640.

Step 3. Apply the maximum. Linda’s accidental injury benefit is up to $20,000 per calendar year. $78,640 is far more than that, so the payment stops at the maximum.

Accidental injury benefit paid: $20,000.

The plan paid this regardless of what her health plan paid. Accident ExpenseGuard does not coordinate benefits with other insurance. Her health plan handled its own share of the $78,890 under its own terms, separately.

The AD&D benefit, step by step

Step 1. Start with her AD&D amount: $20,000, the same as her injury level.

Step 2. Find the percentage. The loss of one foot is 50%.

Step 3. Multiply: 50% of $20,000 is $10,000.

Step 4. Check the timing. Her foot was amputated on the fifth day after the accident, well inside the 30-day window.

AD&D benefit paid: $10,000.

Putting it together

• Accidental injury benefit: $20,000
• AD&D benefit: $10,000
• Total paid to Linda: $30,000

Because the AD&D maximum is for her lifetime, her remaining AD&D amount is now $10,000 ($20,000 minus $10,000). If she were ever to have another covered loss, the plan could pay no more than that $10,000 in AD&D benefits, ever. Her injury benefit is different: it starts over each calendar year.

How the percentages change the payment

The AD&D benefit is a fixed percentage of the amount chosen, not a payment based on bills. That makes it easy to see how a different outcome, or a different level, would have changed it.

• At Linda’s $20,000 level, the loss of one hand would also pay 50%, or $10,000.
• The loss of the thumb and index finger on the same hand would pay 25%, or $5,000.
• The loss of two or more hands or feet would pay 100%, or $20,000, which would use the whole lifetime AD&D amount.
• At the $10,000 level, the loss of one foot would pay 50% of $10,000, or $5,000.

In every case, the AD&D payment is added to the injury benefit, and the lifetime AD&D maximum is the ceiling.

Where the money went

Linda and Ray used the $30,000 in three ways.

Her health plan’s share. A hospital stay this long meant her health plan’s deductible and her share of costs. Part of the payment went there.

Changes at home. Ray rearranged their home so she could get around it. They used part of the money for that and for rides to appointments in the weeks she could not drive.

Her work. She stopped bookkeeping for two months. Part of the payment covered the income she missed.

The plan does not tell you how to spend the money. It is paid to you.

What the plan did not do

Linda’s plan paid a meaningful amount, but it was a fraction of what her accident cost, and some needs fell outside it.

It stopped at the yearly maximum. Her charges after the deductible were $78,640. The injury benefit paid $20,000, the most at her level for one calendar year. The rest was between her and her health plan.

Her prosthetic came later. Prosthetics are on the covered list, under the 30-day treatment window. Her prosthetic foot was fitted months after the accident, and by then she had used her full injury benefit for that year. If you are choosing a plan, ask how the policy treats expenses from one accident that come months later or carry into a new calendar year.

It did not pay for equipment. The policy excludes durable medical equipment. The wheelchair and walker she used in the first months were not paid by this plan.

It did not pay for her outpatient therapy. The policy excludes outpatient occupational therapy and outpatient speech therapy, as well as vocational rehabilitation. Her outpatient occupational therapy sessions were not paid by this plan.

The AD&D benefit has a lifetime limit. She has $10,000 of AD&D left, for the rest of her coverage. It does not reset each year.

The 30-day rule matters. The AD&D benefit applies when the death or dismemberment takes place within 30 days of the accident, or longer in some states. A loss after that window would not qualify under the 30-day rule.

It is not health insurance. Accident ExpenseGuard is a supplement. It is not major medical coverage and not Minimum Essential Coverage, and it should not be used as a substitute for comprehensive health insurance. Linda’s health plan paid for most of her care. Accident ExpenseGuard paid her cash on top of it.

Keeping the plan after a claim

After a claim this size, Linda wondered whether her premium would jump or the plan would be cancelled. The policy addresses both.

Premiums. The policy says the company will make no change in a premium solely because of claims made by a covered person or a change in a covered person’s health. Premiums can change for other reasons, and the policy says you will get at least 31 days’ notice (or longer if your state requires it).

Renewal. The policy is renewable until the earliest of the primary insured’s 70th birthday or death, nonpayment of premium when due (subject to the grace period), a request from you to end it, or fraud or misrepresentation. For Linda, that means she can keep it until she turns 70, if she keeps paying.

Her injury benefit starts over each January at $20,000. Her AD&D amount stays at the $10,000 she has left.

Is this coverage right for someone in their 60s?

Can you still apply? The primary insured and spouse must be 18 to 64 at the time of application. If you are close to 64, timing matters.

How long would you keep it? The policy is renewable until the primary insured’s 70th birthday. If the policy includes dependents, a covered spouse may be able to continue it after that.

Which level fits? The AD&D amount matches the injury amount you choose. At $5,000, losing one foot would pay $2,500 in AD&D. At $20,000, it pays $10,000. A higher level means a higher premium.

What does your health plan leave to you? Look at your deductible and out-of-pocket maximum. This plan pays on actual charges, up to the yearly maximum, whatever your health plan pays.

Are your EOBs organized? The claim runs on your health plan’s EOBs. Someone close to you should know the plan exists, in case they need to give notice for you.

The short version

After a car accident that cost Linda her right foot, Accident ExpenseGuard paid $20,000 in accidental injury benefits and $10,000 in AD&D benefits, $30,000 in all, paid to her. It did not cover her prosthetic, her equipment or her therapy, and it was a supplement to her health plan, not a replacement.

This is an outline of how the plan works. The policy itself sets the full terms, including the exclusions and any state-specific differences.