With a fatal accident happening every four minutes insurance companies have created the accidental death benefit life insurance rider and policy. In this blog post I’ll explain what I mean by “rider” and by “policy”, and provide information on accidental death benefit life insurance.
What Does Accidental Death Benefit Cover?
Having an accidental death benefit covers you in the event that you die as a result of an accident. For example, a death resulting from a plane crash, a bus accident, or a car accident would all be considered accidental. Or for example if you were crossing the street and you got hit by a car, or perhaps you fall off a ladder at home or at work, which results in death – both examples would also be considered accidental death. While policies and companies may differ, typically if you die within 90 days of the accident, the death would be considered due to the accident and the insurance claim would be paid.
Accidental Death Benefit Rider vs. Policy
If you have a traditional life insurance policy, you are covered if you die due to disease or due to an accident. Most policies allow you to get an accidental death benefit rider, which for example would double your coverage if your death was caused by an accident. For example a life insurance policy with a death benefit of $250,000 would result in a $500,000 death benefit if the cause of death was accidental and if you had the rider on the policy.
You can also purchase a life insurance policy that is strictly an accidental death benefit life insurance policy. This type of policy would only cover you if the cause of your death was accidental, and are considerably cheaper than regular policies that cover you for both illness and accident.
Why Purchase an Accidental Death Benefit Policy?
There are several reasons why someone would buy an accidental death benefit policy.
Declined for a Traditional Policy?
If you have been declined for a traditional life insurance policy you can still qualify for an accidental policy. Accidental death benefit policies are “instant issue”. That means there are no health questions, and you can get a policy right away.
Need Coverage Right Away?
Recently, I got a call from a woman who was concerned that her husband was flying overseas on a business trip and was concerned what would happen in the event of a plane crash. Rather than getting a traditional policy that might take a month to get, the couple opted to get an accidental death benefit policy which I was able to get them over the phone in about 15 minutes.
How Much Does it Cost?
An accidental death policy is significantly cheaper than a traditional life insurance policy. The reason for this is that while a traditional policy covers you for death due to illness or accident, an accidental policy only covers you if you die due to an accident. If you are getting a traditional policy, you can typically add a rider for accidental death that would increase your death benefit if you died due to an accident.
At ChooseTerm we work with individuals to help them find the best policy for them.