Accident life insurance also known as "accidental death" insurance, or "accidental death and dismemberment" insurance (which is partly also health/disability insurance), it is types of life and health insurances coverage in case of the insured suddenly death or injure caused by accident.
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What's the Difference Between Life Insurance and Accidental Death and Dismemberment?
By Marilyn Katz
Accidental Death vs. Life Insurance Poicies
When I actively sold life insurance, I would quote rates for traditional whole life or term policies. Many potential clients would show me a much cheaper policy they already had and tell me my rates were too high. Most of the times the premium was so cheap I could hardly beleive it. After I got more experienced, I started to catch on to the product these people really had.
What these people actually had were accidental death and dismemberment policies, and not term or whole life policies. This alarmed me a little. It made my job a little more complicated. I was also concerned because, somehow, these people paid money for policies, but they had no idea what they had actually purchased.
What's the difference between an accident policy and a life insurance policy? Well, as the name implies, an accident only policy only will pay out in the case of an accident, and not an illness. Since the insurer calculates a lower rate of accidental deaths, it can offer lower premiums. An accident is not an illness or natural causes. It is an accident.
You must read the policy terms, or get a quaified agent to help you. But an accident would be commonly associated with a motor vehicle crash, fire, or something along those unpleasant lines. While these misfortunes happen, most people do not die from causes like this. The dismemberment portion of one of these AD&D policies may also cover the insured person against the loss of a limb or.an eye. Again, please study your policy for details.
Life Insurance With Accidental Death Clauses
In fact, many popular life policies will actually offer increased benefits in case of accidental death. This may be included as an AD&D rider that is built into the final premium. They do not do this because this cause of death is common. They do it because it is more rare. It is an extra benefit or selling point that does not add a lot to the cost. It may be much cheaper to get accidental coverage as part of a regular life insurance policy.
A commonl life policy will cover the insured person against any cause of death,. These causes would include illness. Illnesses are not considered an accident.
Many policies do protect the company with a suicide clause. A suicide clause means that the policy will not pay the death benefit for suicide until a waiting period has passed. A typical waiting period, in my state, would be two years. This may sound grim, but you would be surprised how many people ask about it. Also, please do not depend upon a suicide being considered an accident.
Accidental Dismemberment
Now some life policies may include coverage for the lost of limbs or blindness, butt that is not automatic either.
What Did You Buy?
If you are not sure what type of policy you have, it may be time to look at the fine print. Make sure you are purchasing the right policy to help protect your family. Also make sure you are not buying something that will not provide you with the benefits you think you have. You can do more research on your own or consult a qualified insurance professional in your own local area.
Stay Safe!
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