What Is an Accidental Death Benefit with Life Insurance?

When buying life insurance, you have numerous options to consider. Life insurance provides a payout to those that you name as beneficiaries on the policy. This payout occurs if you die.

However, some policies offer your loved ones more protection from high-risk situations. These might be things such as sudden, fatal accidents. As you consider policy options, determine whether accidental death benefit coverage is necessary.

Defining Accidental Death Benefit

Accidental death benefit is a term you will see listed in your life insurance policy in some cases. It is a term that describes a specific type of payout at the time of death. In this situation, the policy will pay out a specific amount of money if your death is accidental.

Comparatively, standard life insurance usually only pays if an individual’s death is from natural causes. Accidental death benefits are often additional payouts given for unexpected and unpreventable deaths.

Some life insurance policies contain an accident death benefit, though not all do. This is often added as a rider or supplement to the actual life insurance policy. It pays out a different amount in addition to the standard benefit payable to your loved ones. This type of benefit can extend up to a year after the accident occurs. This allows time for the insurer and potentially the law to investigate the claim.

When Does Accidental Death Benefit Apply?

The life insurance policy will provide specific information about when an accidental death benefit applies. In most cases, it is due to any type of accident. Exclusions apply. For example, death from war, illegal activities, or high-risk situations are often excluded. If you engage in hobbies thought to be hazardous, death as a result may not have coverage. Again, this depends on the terms of the policy.

Should you have accidental death coverage? This depends on many factors including where you live, the work you do, and the amount of risk you have with the hobbies you engage in. A customized policy that meets your needs is important. Accidental death benefits can help many loved ones who may have to manage the financial loss suddenly.