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Everything You Need to Know About Accidental Death Life Insurance

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Fiona Staff4/15/2021 · 8 min read

Buying a term or whole life insurance policy is an uncomfortable, but incredibly important, way to financially protect your loved ones if something were to happen to you. This coverage can provide temporary or permanent coverage that would replace your lost income, pay off debt, and even fund important future expenses like college tuition.

If you want to build in yet another layer of protection for your family, however, consider the value of adding accidental death coverage to the mix.

Let’s take a look at what accidental death insurance is, what it covers, and how you can purchase this very specific type of protection. 

What is Accidental Death Life Insurance?

Depending on which carrier you buy from, there are two kinds of accidental death protection: an accidental death benefit (ADB) or accidental death and dismemberment coverage, also known as AD&D. 

These types of coverage can be purchased as standalone policies, and are usually a more affordable alternative to full life insurance coverage. However, accidental death insurance is most often offered as a rider (add-on coverage) on basic term or Many companies offer incentives to their employees as part of an employment package. These benefits may include things like healthcare, contributions to retirement savings, gym memberships, and even group life insurance coverage. 

A life insurance policy provided through the workplace can be an excellent way to protect your loved ones, but it comes with a few very important caveats. And in many cases, this coverage might not be sufficient on its own.

This bears the question: if you get life insurance through your company, do you still need to purchase an individual life insurance policy? Or is your workplace coverage enough?

Life Insurance Through the Workplace

When an employer offers life insurance policies through the workplace, it is typically part of what’s called a group plan. This means that the company receives special rates in exchange for enrolling a large number of workers, and they can pass these savings on to their employees.

Group coverage through the workplace is generally offered from specific insurance carriers. There may even be limits on the types of coverage available as well as the coverage limits available. Some employers will allow employees to add coverage for spouses and/or children, while others only offer coverage to the employed individual.

Benefits of Workplace Life Insurance

There are many great benefits to buying life insurance coverage through your company.

As mentioned above, employer-provided life insurance can generally be purchased at a rate that is lower than what you could get on your own. That’s because group coverage typically qualifies for volume discounts, since it’s being offered to a large number of employees at the same time. In some cases, your employer may even offer to pay the premiums for this policy.

Another benefit to workplace life insurance is that medical exams are generally not necessary. These policies are usually considered “guaranteed issue,” making them accessible to employees who might not otherwise qualify for affordable coverage due to age, past health concerns, certain medical diagnoses, or even family medical history.

Downsides of Employer Life Insurance Coverage

As convenient and affordable as purchasing employer-provided life insurance coverage can be, though, there are definitely drawbacks to keep in mind.

Coverage limits

The first downside is that employees are usually limited in the amount of coverage they are able to choose a workplace policy. This is often calculated as a multiple of your salary; for instance, an employer may allow you to purchase no more than five times what you make annually. 

For some, this might be more than enough coverage. Others may whole life insurance.

When accidental death insurance is provided as a rider on a standard term or whole life policy, it provides beneficiaries with additional life insurance coverage. This means that if the policyholder passes away, their beneficiaries will receive the policy’s standard benefit; if the death was accidental in nature, however, their loved ones will receive an additional payout on top of that, thanks to the accidental death benefit.

Often, accidental death coverage also includes dismemberment coverage (though, this is not always the case). With dismemberment protection, policyholders can also receive benefits if they are permanently injured or maimed — but not killed — in a covered accident.

Fiona, in partnership with LeapLife, can easily help you search, compare, and purchase accidental death benefit (ADB) coverage in the form of standalone policies. While ADB coverage doesn’t provide compensation for dismemberment, it offers added protection for your loved ones in case of an accidental death. 

What Accidental Death Insurance Covers

Accidental death coverage provides financial support to beneficiaries when the insured individual dies as the direct result of an accident. This includes deaths that are caused by, but not limited to:

  • Car accidents

  • Slips and falls

  • Choking

  • Drowning

  • Fire

  • Industrial accidents

  • Poisoning (i.e.: carbon monoxide)

Accidental death benefits may pay out for a death that results from a covered accident, even if the insured individual doesn’t pass away immediately. Depending on the insurance company, this coverage period can be weeks or even months long. 

What’s Not Covered

The coverage provided by accidental death insurance is very specific: it only covers accidents. As a result, there are many exclusions for this type of coverage, where a claim for benefits would be denied.

Accidental death coverage may deny a claim for a death related to, or occurring as a result of:

  • Suicide or self-injury

  • An illness, disease, or a medical condition

  • Surgery or medical treatment of a condition

  • Participation in a riot, insurrection, or war

  • Committing a felony

  • Engaging in certain risky behaviors, such as skydiving, bungee jumping, or piloting a plane

  • Military duty or active service

  • Homicide

  • Alcohol or drug intoxication, whether just under the influence or as a result of an overdose

  • Riding in or driving a vehicle that is racing/involved in a speed contest

This list is not exhaustive, so be sure to read your own policy documents to know exactly what is, and what is not, covered for you.

Accidental death coverage can be purchased as standalone insurance in the form of an accidental death benefit (ADB) policy, which exclusively provides protection against sudden, accidental death. It’s also frequently offered as a rider on many life insurance policies, ensuring that loved ones are provided for financially, whether the death is accidental in nature or not.

Dismemberment Coverage

As mentioned, some accidental death insurance goes hand-in-hand with dismemberment coverage. This coverage is called AD&D (accidental death and dismemberment), and offers financial protection following an accident that either kills or maims the insured.

Dismemberment protection offers a reduced payout if an accidental injury results in the loss — or loss of use — of fingers, limbs, sight, hearing, speech, etc. These injuries are usually paid out as a scheduled benefit, meaning that the severity of the injury and magnitude of the loss are taken into account when calculating your insurance payment. For instance, the loss of two fingers in a heavy machinery accident may provide a smaller benefit than losing your whole hand.

Not all accidental death policies and/or riders include dismemberment coverage, however. When searching for a new policy through Fiona and LeapLife, for instance, you’ll be matched with carriers who offer ADB — or accidental death benefit — coverage, which does not provide dismemberment protection.

Is Accidental Death Life Insurance Necessary?

Death is an inevitable part of life, which is why many of us purchase life insurance coverage for our loved ones. Whether we live to be 100 or pass away at a younger age, life insurance benefits provide financial protection to those we would leave behind.

The death of a loved one is always difficult; a sudden and accidental death, however, brings with it unique challenges. 

Accidental deaths are often premature and come without warning. As a result, your loved ones may find themselves facing certain unexpected financial and emotional hurdles. The added benefits offered by an accidental death rider can provide your family with the resources they need to adequately navigate a sudden and often traumatic loss. 

As standalone coverage, accidental death insurance is a cost-effective, albeit somewhat limited, way to financially protect loved ones. However, when combined with a standard term or whole life insurance policy, accidental death coverage can help provide much-needed benefits to your family if an accident were to occur. 

Interested in how accidental death life insurance coverage can protect your loved ones? Let Fiona help! 

LeapLife is the fast and easy way to get matched with personalized life insurance policy quotes in less than 60 seconds, with up to $5,000,000 in coverage, terms of 10-40 years available, and premiums that work for your pocket. See just how easy it is to get matched with personalized policy quotes from their network of top carriers including Pacific Life, Banner Life, and more.

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