Will Life Insurance Cover Accidental Death?


Will Life Insurance Cover Accidental Death?

Yes, standard life insurance policies cover death resulting from an accident and natural causes, but not an intentional act.

If the insured person dies from an accident covered by the policy, the beneficiary will be paid the death benefit.

There are also exclusions to a life insurance policy for war, commercial pilots, and suicide within the first two years you are insured (one year in some states).

Natural causes are not accidents. Accidents are something from the outside that kills you. Natural causes are something from the inside that kills you, including infections and diseases.

There are accidental death insurance policies which only pay out a claim if the insured person dies from a covered type of accident and within a certain period of time of the accidents occurrence.

Typically, only 2-3% of accidental death and dismemberment insurance policies pay out a claim.

Chances of an accidental death are rare as you are far more likely to have an accident than die at age 30 or 35, but it likely won’t kill you.

The reason why accidental death life insurance is so cheap is because there’s very little likelihood that you’ll actually die in a way that’s covered by the policy.

 

Accidental Death Plans are usually accidental death and dismemberment. Dismemberment means disfigurement of your body due to an accident.

  • You lose a finger the insurer pays you.
  • You lose a hand the insurer pays you more.
  • You lose an arm the insurer pays you more.
  • You die, the insurer pays your dependents.

 

Make sure you read the life insurance policy closely because it clearly spells out in the life insurance contract what is and is not covered.

For a 25 or 30-year-old the premiums for a life insurance policy or accidental death insurance plan are very affordable, actually cheap compared to other types of life insurance plans.

 

Does Term Life Insurance Cover Accidental Death?

Yes, a term life insurance policy does provide coverage for accidents.

Term life pays out a death benefit for death caused by natural causes and accidents.

So, if you die as a result of an accident, your beneficiary would receive the death benefit from your term life insurance policy, as long as:

  1. The premiums were paid.
  2. The term of your policy has not expired.
  3. Your term life policy is "In Force".
  4. No exclusions applied to the accident that caused your death.

 

NOTE: Some life insurance policies may apply exclusions for certain high risk activities, so if you died as a result of those excluded activities, there would not be a death benefit paid out on your life insurance policy. 

In addition, there are accidental death insurance policies that provide protection only for death resulting from an accident. The rates on these life insurance plans are less than regular life insurance that covers natural causes and accidental death.

Accidental life insurance works if you are involved in a car accident or any type of accident and you die, the life insurance company will pay out the death benefit from your life insurance policy to your beneficiary.

But you have to remember this type of life insurance policy only pays out if you die as a result of an accident, not from natural causes of death; such as, old age.

Death resulting from natural causes is not covered by an accidental life insurance policy.

And, usually the insured must die within a certain amount of time of the accident, such as, within 6 months of the accident that caused death, in order for an accidental death plan to pay out a death benefit.

All life insurance policies will pay their stated death benefit amount in the case of death of the insured person resulting from an accident

 

Double Indemnity

If you have elected to purchase an Accidental Death Rider, the life insurance policy will pay more than the death benefit, sometimes double or triple the amount of your life insurance coverage amount. 

This is sometimes referred to as "Double Indemnity" life insurance coverage.

These accidental death riders are also sometimes sold as separate life insurance policies known as Accidental Death and Dismemberment Insurance or AD&D. 

For the purpose of such life insurance riders or AD&D insurance policies, an accidental death is defined as a death that is neither intentionally caused by a human being, such as a homicide or suicide, nor the result of natural causes such as heart disease or cancer.

There are usually other limitations on accidental death benefits, including but not limited to death during a surgical procedure, or from a bacterial infection, hernia, or an overdose of drugs. 

In addition, most accidental death policies or riders do not cover high risk activities such as skydiving, auto racing, or acts of war. And, you may need to die within 6 months (usually) of the accident in order for the accidental death to be covered by the insurance policy.

  

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