Understanding Accidental Death Insurance
Accidental death benefits are provisions that can be added to standard life insurance policies at the insured's request. Some people choose to add accidental death benefit riders to their policies in order to protect their beneficiaries in the event of an accident. This is significant because accidents are unpredictable and can leave family members in a bind when a death occurs unexpectedly.
These death benefits are especially important for people who work in or near potentially hazardous areas. Even those who drive more than the average amount of time, whether professionally or as a commuter, should consider becoming accidental death benefit riders.
The insured party must pay an additional fee on top of their regular premiums to purchase this benefit as an optional feature. The accidental death benefit, while it may come at an additional cost, increases the payout to a policy's beneficiary. This means that the beneficiary receives both the policy's death benefit and any additional accidental death benefit covered by the rider. These riders typically expire when the insured person reaches the age of 70.
What is Accidental Death?
Accidental death is defined by insurance companies as an event that occurs solely as a result of an accident. Accidental deaths include those caused by car accidents, slips, choking, drowning, machinery, and any other uncontrollable circumstances. In the event of a fatal accident, death must usually occur within a time frame specified in the policy.
Some policies' accidental death benefits may also cover dismemberment (total or partial limb loss), burns, paralysis, and other similar situations. These are known as accidental death and dismemberment (AD&D) riders.
Acts of war and death caused by illegal activities are typically not considered accidents. Illness-related death is also excluded. Any dangerous hobbies that the insured regularly engages in—racing cars, bungee jumping, or any other similar activity—are also specifically excluded.
Types of Accidental Death Insurance
Supplement for Group Life
The accidental death benefit plan is included as part of a group life insurance contract, such as those offered by your employer, in this type of arrangement. The benefit amount is usually the same as the group life benefit amount.
This accidental death benefit plan is available to group members as a separate elective benefit. Premiums are your responsibility if your employer provides them. These premiums are typically deducted from your paycheck on a regular basis. Employees are protected in the event of an accident on the job. Benefits for voluntary accident insurance are paid out even if the insured party is not at work.
The accidental death benefit plan in this arrangement is provided through an employee benefit plan and provides workers with supplemental accident protection while on company business. Unlike voluntary accident insurance, this coverage is usually paid entirely by the employer.
Some group accidental death benefit plans cover dependents as well.
- The beneficiary of an accidental death insurance policy receives an accidental death benefit.
- Accidental death benefits are provided to the beneficiaries of those who die as a result of an accident.
- Accidental death benefits are not included in standard life insurance policies because they are optional riders.
- Certain occupations and workers in hazardous environments should think about adding an accidental death benefit rider.