Road accidents and crash insurance

Part of the war on traffic accidents, the government set an upper limit of no more than 375 fatalities in traffic accidents in 2009. We listen to the “Green Light Movement” commercials on the radio and continue driving. Maybe some of us take our foot off the gas pedal for a second, but our lives go on. Every death is a disaster for the family and leaves them alone to deal with the trauma later in life. Along with the trauma, there is also a financial pit that must be understood and taken responsibility for ahead of time.

From a purely economic point of view, the economic price of a person can be calculated. The issue comes up for discussion when the insurance agents sit with their clients and try to calculate the amount required in a death coverage policy – a risk policy. The question is: how much money is required for the family to continue its lifestyle after the death of the father or mother of the family?

The calculation that must be taken into account is mainly based on parameters of living expenses and income of the family from work or from external sources.

For example, let’s take a married couple with three children who together earn NIS 14,000 net, where the main breadwinner earns NIS 8,000 net, and the secondary earns NIS 6,000. When the main breadwinner dies, the family loses a monthly income of NIS 8,000, but on the other hand cannot cut down on regular living expenses (house maintenance, food, clothing). It is possible to deduct the private expenses of the breadwinner who is no longer there, but this is a small offset compared to the fixed expenses. On the other hand, the family has become a single-parent family and the remaining breadwinner will eventually want to continue working and continue his life and will need additional help, which will also be reflected in financial expenses such as hiring a part-time nanny for the children. After calculating the discontinued income and perfecting the part that can be received from alternative sources such as social security or compulsory insurance (in the case of a car accident), an actual number is created which must be multiplied by multiples of the number of years left for the family to exist and at least until the end of raising the children, 24 or even more.

In the example we took, after the death of the main breadwinner, the family needs a total of NIS 7,000 net per month, from which the amount due from National Insurance and the amount due from the pension policy or the directors’ insurance that the deceased had should be deducted. It was said that after offsetting there is still NIS 3,500 net that is missing per month, which is NIS 42,000 a year, and when the little boy is 4 years old, there are still about 20 years left to provide for the family. In compound interest calculations, this is an insurance amount of about NIS 600,000 that the family must receive. This amount will ensure cash flow and allow the family to continue its life.

A check with the insurance companies shows that the average insurance coverage in case of death is only about NIS 260,000!!! The public does not address the need to be insured for the correct amounts and to take care of a source of income for the family in times of need. While there are workplaces that provide more collective risk insurance, the insured amounts are usually not that high. A family member injured in a car accident leaves a void that will never be closed, but at least the financial void created can be taken care of.

Road accidents take a heavy toll, not only in human life. The number of injured from accidents is infinitely greater than the number of dead. Although the injured family member remains alive, the life of the family becomes difficult in an instant, together with the ongoing operation of the house, the family has to take care of the injured – tests, hospitalization, nursing the injured leaves the family with many expenses, and if the injured is seriously injured this takes time, and after a few For months, the monthly salary also no longer comes from the workplace. This should also be prepared ahead of time by checking the coverage for loss of working capacity, accidents and disabilities.