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Deciding which life insurance policy option is best for you can sometimes be confusing. But, it shouldn’t be. There’s an easy method through which you can differentiate between an accidental death policy and other traditional policies.
In this post, we’ll be dwelling on what accidental death policy is when a death is deemed accidental, what its types are, how much it costs, how you can purchase one, and how it works.
What is Life Insurance Coverage for Accidental Death?
In simple words, it’s the protection your beneficiary receives in case your death is a result of an accident. In this type of policy, your beneficiary will only be paid in case you died by accident.
It’s worth saying that its plan doesn’t include any kind of underwriting and is accordingly always guaranteed.
There are also some age restrictions limiting your ability to apply. For instance, some policies cover for people who are between the age of 21 and above 50.
Yet, because the policy pays only if the death is accidental, there are no health issues which may hinder a beneficiary from getting covered.
Also, the policy’s plan will include a policy number, a death benefit, a beneficiary/s, and monthly premiums.
The amount of premium you pay is a simple way to make sure you’re on an accidental death policy. Such a policy’s plans are literally the most affordable.
When is a Death Deemed Accidental?
When deciding to purchase a policy, it’s crucial to know what you’re getting into.
So, accidental deaths are caused by the following things:
Falls
Such falls include all falls linked to deaths taking place outside of transport vehicles. In other words, if your death is caused by a fall inside of a plane, it doesn’t fall in the policy’s fall category.
Road Accidents
Car accidents are not the number one death cause anymore, for motorcycle accidents have excelled them in this regard.
Fire-Caused Deaths
Deaths caused by all kinds of burns all under the category of the fire-caused deaths.
Firearms
These are deemed accidental only when they are a result of recreational activities or/and household-related accidents.
Ingested Objects
Deaths caused by ingested objects like toys that block the air passage are considered among the policy’s accidental deaths.
Drowning
Any deaths caused by drowning excluding naturals disasters such as floods.
Accidental Poisoning
It’s worth mentioning that accidental poisoning is undoubtedly considered among the popular causes of accidental deaths in the States.
Other Accidental Deaths
Other accidental deaths include medical complications, consequences of falling objects, plane injuries, suffocations, and machinery interaction.
Deaths Considered Non-Accidental (don’t fall into our category)
There are some exceptions to the policy at hand.
These include:
- War deaths
- Natural disasters
- Deaths resulting from taking illegal drugs
- Bacterial infections
- Deaths caused by mental issues
- Suicide
- Non-commercial radiations
- Deaths caused by hernia
- Dangerous hobbies such as skydiving
- Unlawful activities
- Driving while drunk
- Deaths after/during a surgery
Types of Accidental Death Coverage
This policy includes many different types in terms of its coverage.
They include the following.
Voluntary
This type of coverage is usually used to insure employees. So, in case you’re an employee, the premiums you pay will be automatically deducted from your paycheck based on a regular basis.
Travel Accidents
Travel accidents also fall into an employee benefit plan. This plan offers employees financial protection while on business travel.
It’s worth saying that the premiums are fully paid by the employer.
Dependents
In some cases, the policy covers the employee’s dependents.
Supplement-to-Group Coverage
Accidental death coverage can sometimes be provided as part of a group employee plan. In such a case, the total benefits the beneficiary will get will be equal to the individual’s group benefits.
So, in this plan, the benefit will be doubled in case the insured passes away due to an accident.
How Much Does It Cost?
There are many factors that are responsible for determining the cost of the policy. For instance, if the coverage is provided within employee coverage, the employer will be responsible for paying some or all of the premiums.
In most of the cases, this policy can be cheap whether it’s received as an employee package or as an individual policy bought by a customer.
Note that the premium price depends on the health status, age, gender, height, and weight of the customer/applicant as well as the risk factors linked to their workplace.
For instance, someone who works as a receptionist in a company often pays less for the policy than someone whose work involves heavy construction tools.
Does the Policy Include Any Beneficiaries?
As part of the policy, you will need to create a list of your beneficiaries who will be receiving the payout after your accidental death.
It should be noted that the policy might take time to pay your beneficiary/s out because it may ask for an autopsy which is required by the insurance company to confirm that your death resulted accidentally and is a condition covered by the policy’s plan.
Pros are Here
There are many benefits of purchasing an accidental death life insurance policy. These benefits include:
- No Medical: because the policy doesn’t cover for natural causes of death, buying it will not require you to do any medical test.
- Inexpensive: such a policy is relatively inexpensive, especially when compared to whole life insurance policies.
- Coverage Starts Right Away: because this policy does not require any medical test, it often starts right away. In other words, you won’t need to wait for many weeks before the policy goes into force.
FAQs
What does fully-paid up policy mean?
It means that you’ve so far paid the premiums required to cover the policy’s cost. Depending on that, the insurance company will utilize your cash value for paying your premiums until the day of your death.
What is the definition of underwriting process?
It’s a process through which your risk is assessed after you do the medical test required by the insurance company.
However, bear in mind that since the policy at hand doesn’t involve any underwriting process, the insurance company often won’t require you to do a medical test.
What if I pass away uninsured?
As you mostly know that the primary purpose of life insurance is to protect the beneficiary/s after your death/accidental death.
Whether it is mortgage balance or funeral expenses, a suitable life insurance policy will help your beneficiary/s get away with such hardships.
When it comes to the funeral, let’s assume no one pays for your funeral. In this case, the government will bury your corpse in a potter’s field.
If one of your loved ones decides to have a proper burial and funeral for you, they will pay it themselves or resort to any cash/assets you left to pay for it.
That’s why experts recommend purchasing a life insurance policy including an accidental death-based policy.
Suppose I already have a policy; can I buy another one (accidental death one)?
Some people might want to have another policy that financially protects their beloved ones after they accidentally die. So, the answer is ‘yes, you can.’
How is the insurer informed of my accidental death?
The first thing your beneficiary will need to do is file a claim. Then, they will need to request a death certificate including the death cause, the policy number, address, and finally the security number.
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