-
Determine if Accidental Death Insurance Right for You
Accidental death insurance is a type of insurance that pays the policy limit amount to a beneficiary of the insured in the event that the insured is killed in an accident. Accident death insurance differs from standard life insurance in that it only pays if the insured person dies as a result of an accident; whereas, life insurance will pay if the insured dies for almost any reason.
Many times, accidental death insurance policies are provided together with a dismemberment policy, and are commonly referred to as accidental death and dismemberment insurance coverage policies. This type of coverage is very inexpensive when compared to other types. It is something to consider, offering protection and peace of mind to a spouse or other loved ones in the event of an accidental and untimely death.
How Accidental Death Insurance Works
When you purchase an accidental death insurance policy, you will be required to name a beneficiary. In the event you are killed in an accident, the insurance company will pay up to the maximum policy limit to your beneficiary. Because as accidental insurance policy only pays out in certain situations, this type of coverage can be considerably less expensive than regular life insurance policies.
AD&D policies are generally inexpensive. An accident is defined by the insurance company who controls how the benefit is paid. Since the policy only pays out in the event of an accidental death, medical examinations or prior health issues are usually not considered when offering accidental death insurance coverage. Statistically speaking, most people die of other causes other than accidents, insurance companies make this type of coverage available at very inexpensive rates.
When Accidental Death Insurance Pays Out
Accidental death insurance will pay your beneficiary the amount of your policy if you’re killed in almost any type of accident. Accidental death insurance covers death in a car accident – whether you are the driver or a passenger. The coverage also pays out if you’re killed in a plane crash or another type of accident that involves mass transit or public transportation. In fact, many accidental death insurance policies pay out more if you are killed in an accident while using public transportation.
AD&D policies pay a principal sum based on accidental death or the loss of the use of two limbs. It also pays the principal sum or amount when a person loses the complete use of their eyes, hearing or speech, resulting from an accident. A smaller capital sum, which is equal to half of the principal sum is paid when an accident results in the loss of the use of one limb or partial sight or hearing.
When Accidental Death Insurance Policies Don’t Pay
If you die from any cause other than an accident, an accidental death insurance policy will not pay. For example, if you die due to an illness or while undergoing surgery, the policy would not pay your beneficiary anything. However, if you have a life insurance policy, that policy would pay benefits to the beneficiary.
When to Consider Accidental Death Insurance Coverage
Because accidental death insurance coverage is so inexpensive when compared to other types of insurance, it should be a policy type that you consider. If you have a family, an accidental death insurance policy can offer greater protection and peace of mind to your spouse and children. If you have a regular life insurance policy, and are killed in an accident, your family would receive benefits from both your regular life insurance policy and the accidental death insurance coverage. If you have anyone at all that depends upon you for support, you should consider purchasing this type of coverage.
Understanding how an accidental death policy works is important. This type of insurance can be sold as a standalone policy or as a rider to a life, health and automobile insurance policy.
