Accidental Death Benefit Rider: In the event that you die in an accident, the Accidental Death Benefit Rider of your life insurance policy will pay an additional amount – usually two times the amount of the benefit – to your beneficiaries. In today’s post, we’ll go over the pros & cons of the accidental death benefit rider, how the best life insurance companies determine the cost, and why you may want to add this rider to your policy. Let’s get started!
Accidental Death Benefit Rider
What Is an accidental death benefit rider? How Does It Work and What Are The Benefits?
While nobody likes the idea of possibly being an accident, accidents can happen anytime anywhere. With an accidental death benefit insurance policy, you can be sure that should something happen to you that your loved ones will be taken care of after your death.
According to the Centers for Disease Control and Prevention, more than 130,000 deaths are occurring because of an accident of some type. In fact, they are the fourth leading causes of deaths in the United States.
What Is An Accident?
For those that don’t understand what an accident is; it’s the sudden traumatic event that was not intended or planned that leads to injury or death. It’s the kind of event that you have no control over. An accident can involve a motor vehicle, “accidental” poisoning, suffocation, choking, slips and falls, drowning, etc.
Should you be hit by a car walking across the street or you are in a bus crash, this is all considered an accident and would qualify for the accidental death benefit rider.
A Look At The Accidental Death Benefit Rider
Life insurance companies provide an array of add-ons and options to choose from, with the intent to make it significant for policyholders. Insurance companies provide life insurance riders that lets the policyholder tailor a policy that’s best for them. The accidental death benefit rider is one such benefit.
Many times, when the main breadwinner of the home has become injured or died an accident, the rest of the family faces financial ruin. Hospital bills, physical therapy bill, doctor bills – the cost can really add up. Add that to the possibility of an accidental death, and it’s not just the immediate expense the family has to contend with. It’s also the income that’s missing.
When the primary breadwinner passes away, it’s both emotionally and financially traumatic.
The great thing about this rider is that it can be applied to any kind of insurance you have. The policy starts and pays out if the following guidelines are met:
- The policy was in place 90 days before the insured suffered an accidental bodily injury.
- The policy anniversary is near the insured’s 70th
- You have an active policy and rider.
The minimum benefit amount that you can get is $5,000.
How Can You Benefit From The Rider
The rider will protect your family from accidents that lead to your death, which can affect the household’s income for many months or years. Should you suffer an accidental death, the insured will receive an extra amount – typically two times the amount insured.
It’s often noted as being a double indemnity and raises the death benefit should you die in an accident. This rider may also come with a dismemberment clause, meaning you could receive money if you lose a limb.
Why Should You Purchase The Accidental Death Benefit Rider?
There are two key reasons in which you should purchase the rider:
- You work in a dangerous environment such as working around heavy machinery.
- You drive more than the average (professionally or commuter)
Possible Exclusions To The Accidental Death Benefit Rider
The rider does come with some exclusions such as death by the following events:
- Illegal activities
- Sickness not due to infection related to an accident
- Self-included injuries (suicide)
- Acts of war
- Drug or alcohol abuse (not included using prescribed medication with deadly reaction)
- Surgical or medical treatment
- Airline work that involves being on the aircraft, such as pilot, co-pilot, stewardess, etc.
- Dangerous hobbies (deep sea diving, skydiving, mountain climbing, etc.)
It’s not uncommon for age to be included in the exclusion. Many insurance companies do not include it on people 70 years old and older.
When a claim is made under the policy, the insured will probably undergo an autopsy. An investigation will be done to ensure that your “death” qualifies for the accidental death benefit rider. Before a payout is given, your loved ones will need to file the right forms with your death being ruled as an accident the policy covers.
How To Do Insurance Companies Determine Cost?
An insurance company will look at your hobbies and job to determine how much premium you will pay each month. Since it’s not typically added in a basic life insurance policy, adding this rider to the policy will increase the premium you pay.
The cost for this rider isn’t typically very high since the majority of deaths fail to meet the criteria of the rider provision. Long-health illnesses that lead to death is more common than dying in a work-related or automobile accident. Most accidental deaths won’t cause long-term financial ruin as an extended illness can.
While the accidental death benefit rider does cost less than a traditional policy, you should have both. If you were to die because of some other reason other than an accident (for example – a health related death), your loved ones won’t get the financial assistance they need to pay for your funeral or other expenses. Adding a rider like the accidental death benefit rider to your traditional life insurance policy ensures that your family will be protected no matter how you pass away.
If you opt to buy this rider for your policy, be sure to find out which deaths are and are not covered. You also want to be sure it’s added to your quote when looking for life insurance with the accidental death benefit rider.
Getting an accidental death benefit rider on your policy is a cheap add on that can provide additional benefits to your family members and keep them protected.
We are prepared to answer all of your questions about accidental death benefit riders, and we will work to find you the best life insurance rates possible.
Ready to take the next step? Contact us today or fill out our quote form on this page. We very much look forward to helping you protect your family.
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