What Is Accidental Death Insurance

Accidental Death Insurance
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    Accidental Death Insurance vs Life Insurance

    Would you like to find out how you can protect your loved ones more? 

    Well, you are in luck. There are many ways you can do this. You can start by finding out the difference between accidental death insurance and life insurance. These insurance plans can help with mortgage payments and other bills.

    What coverage will you need? 

    When younger, you might think that accidental death will be your main concern. Maybe an injury at work, fire, or a car crash. In these instances, accidental death might seem like the best way to go. 

    There are some pros and cons with accidental death insurance that you should be aware of. What are these you may ask? 

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    The biggest con is that you may not need this type of insurance. According to the CDC, there are only 5.4% of accidental deaths. What if you or a loved one passes away from another cause? In these instances, the accidental death policy isn’t going to do you or your family any good.

    So, how can you go about making the right decision? It’s understandable that you might be feeling a bit overwhelmed. 

    There is good news. 

    You can find the policy that is best for you and your loved ones without too many complications or frustrations.

    Learning More About Accidental Death vs. Life Insurance

    What do you need to know about accidental death insurance? 

    First, this is also referred to as AD&D or accidental death and dismemberment insurance. Many times this is the only alternative to permanent and term life insurance options. 

    This type of insurance is available through many different companies and the name says it all…

    The loved ones of the deceased get a lump sum payout when accidental death insurance is paid out. This is called the death benefit. Natural causes or illness-related deaths aren’t paid out through this type of insurance.

    What about the dismemberment coverage? 

    If you lose a limb, become paralyzed, or severely injured, this part of your insurance may pay money out to you. However, that doesn’t apply to every accidental death insurance policy. 

    How much does AD&D pay out? 

    Generally, an accidental death policy will go up to a $500,000 benefit payout

    What about term life insurance? 

    Most of the time term life insurance will pay out a certain amount if your loved one passes away within 10, 15, 20, or even 30-years. The way that someone passes away doesn’t necessarily matter for the payout with term life insurance. 

    There isn’t a $500,000 cap with term life insurance coverage either. For example, we help people secure much higher coverage amounts like $1 million term life and $5 million life insurance policies. Just remember, to read the fine print for any limitations. 

    The biggest con is that you may not need this type of insurance. According to the CDC, there are only 5.4% of accidental deaths. What if you or a loved one passes away from another cause? In these instances, the accidental death policy isn’t going to do you or your family any good.

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    Price When Comparing Accidental Death vs. Term Life Insurance

    We all know that price matters…

    The good news is that both accidental death and cheap term life insurance options are generally affordable. In fact, these are usually more affordable than the permanent life insurance options. 

    How much protection do you want or need? 

    This will affect the price when comparing the different life insurance options as well. 

    Let’s get more into the cost comparisons…

    Term Life Insurance Pricing Information

    Example: A 30 year old man in great health could get a $500,000, 30 year term life insurance policy. This may cost around $35 each month. If he passes away from a health problem or other illness, the beneficiaries would get the pay out.

    Accidental Death Insurance Pricing Information

    Example: Same man as above could get a $500,000 accidental death insurance policy. This would last until he is 60 years old and cost around $30 each month. Limitations may include passing away during the 30 year mark from a health issue or illness and the policy wouldn’t pay out.

    Guaranteed Issue Life Insurance

    You may also want to look at a guaranteed issue policy you are unable to qualify for a basic term life policy because of a health issue or other risk factor. Also referred to as GI policies, they are typically small whole life policies that provide up to a $25,000 death benefit. 


    The advantages of guaranteed issue policies:


    There are some drawbacks:

    • Small death benefit
    • Graded death benefit: This is typically a 2 year waiting period on the full death benefit.

    Be sure to check out the best guaranteed issue life insurance companies if you’re interested in a GI policy.

    Coverage with Accidental Death Insurance

    You probably want to know more about what the accidental death insurance will cover, right? 

    Some of the things you should know about accidental death insurance are: 

    • Passing away from a fire, drowning, choking, suffocation, falls, work-related accidents, biking accident, or a car accident 
    • Possible coverage for dismemberment 
    • Generally, won’t cover fatality from physical illness, mental health issue, such as alcohol or depression, or surgery related fatality. 
    • Coverage generally from 60 to 80 years of age, but may vary depending on the company or state
    • Affordable policies

    So, is this the right insurance policy for you or your loved ones?

    If you can’t get life insurance due to health issues, the accidental death insurance may be right for you. Those that are looking for a lower cost may prefer the accidental death policy, although, again you should pay attention to the fine print and when the pay out will or will not occur. 

    Coverage with Term Life Insurance

    Now, you should find out more about what term life insurance can do for you. 

    Some of the things you should know about term life insurance are: 

    • A death benefit of a certain amount (face value of the policy) is paid when the person passes away in a certain time frame
    • Various term policies exist with different face amounts 
    • Some limitations may include suicide within a certain time frame or not disclosing certain information during the process of applying
    • Affordable policies

    Does this sound like the insurance policy you or your loved one need? 

    Picking the Best Choice for You or Your Loved One

    Is accidental death or term life insurance the best for you? 

    Picking out the best insurance to protect yourself or your loved ones doesn’t need to be complicated. There are many scenarios which could occur. Having the comfort of knowing you picked the right insurance policy is also great. 

    Here are some final things you need to know: 

    • If you can’t quality for a medical underwriting through a life insurance policy, you may want to get accidental death insurance
    • If accidental death insurance is the only one you can afford, it may best 
    • If you don’t have a complicated health history and you are healthy, term life may be the best option

    Life insurance is a good thing for everyone to have. Both accidental death and term life insurance are great ways to protect yourself or your family. 

    If you’re not sure where to begin, give us a call. Our agents provide a free, no-pressure, educational approach to life insurance. We’ll compare dozens of the top companies in minutes to show you your most affordable options. 

    Michael Quinn

    Michael Quinn

    Michael is a licensed life insurance agent, expert & owner of Life Insurance Blog. LIB has helped thousands of shoppers understand life insurance and secure affordable coverage.

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