A Guide to Accidental Life Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is Accidental Life Insurance?

Accidental life insurance, often referred to as accidental death insurance, is a type of insurance policy that provides a payout to your beneficiaries if you die as a result of an accident. Unlike traditional life insurance, this policy is specific to accidental causes and does not cover death from natural causes or illnesses.

Key Features of Accidental Life Insurance

  • Accidental Death Coverage: Provides a death benefit if you die due to an accident, typically within a specified time frame after the incident.
  • No Medical Exam: Most policies do not require a medical exam, making it easier and quicker to obtain coverage.
  • Affordable Premiums: Generally lower premiums compared to traditional life insurance policies, as the coverage is limited to accidental causes.

Inclusions:

  1. Traffic Accidents: Covered in most policies.
  2. Falls: Unexpected fatal falls are usually included.
  3. Drowning: Accidental drowning is typically covered.

Exclusions:

  1. High-Risk Occupations: Pilots, deep-sea divers, etc., may have exclusions.
  2. Illegal Activities: Deaths during the commission of a crime are not covered.
  3. Drug or Alcohol Use: Death while under the influence may be excluded.
  4. Surgery: Death during surgery is not considered accidental.

Additional Considerations:

  • Double Indemnity: Some policies pay extra for accidental death.
  • Waiting Periods: There might be a period after policy initiation during which accidental death is not covered.
  • Age Limits: Coverage for accidental death may decrease or cease past a certain age.

Pros and Cons of Accidental Life Insurance

Benefits of Accidental Life Insurance

  • Simplified Approval Process: This process is easier to qualify for since it typically doesn’t require a medical exam or extensive health history.
  • Financial Security: Offers peace of mind knowing your loved ones will receive financial support if you die unexpectedly due to an accident.
  • Cost-Effective: Lower premiums make it an affordable option for supplemental coverage.

Limitations of Accidental Life Insurance

  • Limited Coverage: Only provides benefits for accidental deaths, not for deaths due to illness or natural causes.
  • Time Frame: Benefits are often only paid if the death occurs within a specific period after the accident, such as 90 days.
  • Exclusions: Certain activities, such as hazardous hobbies or occupations, may be excluded from coverage.
Accidental Life Insurance

Who Should Consider Accidental Life Insurance?

  • Young and Healthy Individuals: Those who do not qualify for traditional life insurance due to health reasons may find accidental life insurance a viable option.
  • Supplemental Coverage: Individuals who already have life insurance but want additional coverage for accidental death.
  • High-Risk Individuals: This type of insurance may benefit people who are more exposed to accidents due to their job or lifestyle.

How to Choose the Right Accidental Life Insurance Policy

  • Assess Your Risk: Consider your job, hobbies, and lifestyle to determine your risk level and the amount of coverage you may need.
  • Compare Providers: Look at different insurers and policies to find the best coverage options and premiums.
  • Understand Policy Details: Read the terms, conditions, and exclusions carefully to ensure the policy meets your needs.
Accidental Death Insurance

How We Can Help

At The Annuity Expert, we understand that finding the right insurance coverage can be challenging. We are an insurance agency, annuity broker, and retirement planner with 15 years of experience. We believe in finding the best solution at the lowest costs for our clients.

Understanding Your Needs

We recognize that navigating the complexities of insurance can be overwhelming. Our goal is to simplify this process and help you make informed decisions. Whether you need additional coverage for high-risk activities or want to ensure financial security for your family, we are here to guide you every step of the way.

What We Recommend

  • Step 1: Initial Consultation
    • During our initial consultation, we will assess your specific needs and risk factors. This helps us tailor our recommendations to your unique situation. The main benefit of this step is gaining a clear understanding of your insurance needs and goals.
  • Step 2: Policy Comparison and Selection
    • We will compare different accidental life insurance policies from various providers, ensuring you get the best coverage at the most affordable rate. During this step, you will benefit from our extensive knowledge and experience, which allows us to find the most suitable policy for you.
  • Step 3: Policy Implementation and Ongoing Support
    • Once you’ve selected a policy, we will assist with the implementation process and provide ongoing support. This ensures that your policy remains aligned with your needs over time. The main benefit is the peace of mind that comes with knowing you have reliable coverage and continuous support.

Features and Benefits

  • No Medical Exam: Quick and easy policy approval without extensive health checks, meaning faster coverage for you.
  • Affordable Premiums: Cost-effective coverage ensures you can protect your loved ones without financial strain.
  • Tailored Coverage: Customized policies based on your specific needs and lifestyle, ensuring you get the best possible protection.

Overcoming Objections

Some might think accidental life insurance is unnecessary, but it’s an affordable way to provide additional security. Not having this coverage could leave your family vulnerable in the event of an unexpected accident. Working with us ensures that you receive expert advice and the best possible protection, fostering internal peace of mind and security for you and your loved ones.

Contact us today for free advice or a quote.

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Questions From Our Readers

Do life insurance policies pay double for accidental death?

Not all life insurance policies pay double for accidental death. The payout depends on the specific terms of your policy. Generally, life insurance policies include a base benefit amount, say $100,000. If your policy has an accidental death benefit (ADB) rider, it can pay an additional amount in case of accidental death. The ADB amount can be equal to, less, or more than the base policy amount. For instance, if you have a $100,000 base policy and a $200,000 accidental death benefit, the policy would pay double ($300,000 in total) in case of accidental death. Conversely, with a $100,000 base policy and a $50,000 ADB, the total payout would be $150,000, not double the base amount.

Why is accidental death insurance cheaper than regular life insurance?

It is cheaper because there is no underwriting, it is a very specific scope of death that is covered, and there are lower maximum policy coverages available.

Can accidental life insurance be cashed out?

Accidental life insurance typically cannot be cashed out as it doesn’t accumulate cash value. It’s designed to provide a death benefit if the insured dies due to an accident, not to offer cash value or investment options like whole or universal life insurance.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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