Written By Natalie Rutledge
There are many forms of life insurance policies, and one that often throws people for a loop is the accidental death policy. This is a special form of insurance that only pays out if you died by an external accident, like a car wreck or a plane crash. This policy can be written on its own, or it can be tied into another, broader form of life insurance. Let’s take a moment to assess what accidental death insurance really is to determine if your term life insurance policy already covers it.
What Accidental Death Insurance Covers
Accidental death insurance covers exactly what the name implies–death by accident. The definition of “accident” is what throws most people off. Just because you die unexpectedly or without intention doesn’t mean you died by accident. Medical issues of any kind are not considered accidents because they occur internally. It is somewhat similar to a car that starts having problems and eventually stops working. The insurance company won’t pay you because the car was faulty, but it will pay if the car is totaled due to a collision.
The only way an accidental death policy will cover your expenses is if something beyond your control or body kills you.
It may seem odd but in many cases, an accidental death policy will not pay due to a murder. The insurance industry believes that murders do not happen “accidentally.” Is this fair? Maybe not. Nevertheless, that is how the policies operate.
In addition, you will likely not be covered if you die in a war. Most insurance companies have exclusions on their policies for people who are killed in combat. That is because those people are at a greater risk of losing their lives. Again, this may not seem fair, but it is something that you need to be aware of before you decide on getting such a policy. If you are a soldier out on the field, you need to understand what your policy will and will not cover in battle.
Does Term Life Insurance Cover Accidental Death?
Term life insurance does, in fact,
cover accidental death. With term life insurance, your expenses should be covered no matter how you die, even if it is not an accident. Thus, if you are ever asked to buy a separate accidental death policy, verify that your family will receive the benefits in the case of an accidental death. Then, decline the offer. It should not be needed.
Accidental Death vs. Term Life Insurance
Since term life insurance policies cover accidental death, you may wonder why people buy an accidental death policy in the first place. For some, it is simply a form of protection they don’t realize they already have. For others though, accidental death insurance is all they can afford. Life insurance is rather inexpensive on its own, but exclusive accidental death policies are even cheaper. Why? Because they offer very little coverage for the money. The chances of you actually using an accidental death policy are very slim. That is why it is usually better to invest in a term life policy instead.
Whole life insurance will cover accidental death as well, if you feel the need to have that kind of policy. It will cost you a lot more money each month, but it will give you a chance to save for the future. Whether you choose term life or whole life to cover your final costs, you will not have to worry in an accident. That part of your coverage will kick in automatically.
Making Sure You Are Covered
It can’t hurt to look over your policy to see if you are covered for accidental death insurance. There may not be an explicit clause with this label, but there should be a section of the policy that outlines what is and is not covered. If accidental deaths are left out of the coverage details, contact your insurance company and see what you need to do to get protection. They may be able to add a rider to the policy for a low fee.
The right life insurance policy will take care of your loved ones once you have passed away. Make sure you are properly protected today.