What’s the Deal with Accidental Death Insurance?

Accidental Death (AD) insurance is similar to Life insurance. But it shouldn’t take the place of Life insurance. It can supplement your Life insurance. But you don’t need Life insurance to get Accidental Death insurance. Confused yet? Take a breath and relax, by the end of this short article, it will all make sense.

What is Accidental Death Insurance?

Accidental Death is an insurance policy that pays out – in addition to Life insurance – when the policyholder dies as the direct result of an accident; think skiing accident or car accident. Due to the low probability of an accidental death, the premiums tend to be very low.

It’s so cheap, can’t I just get this instead of Life Insurance?

If you are healthy, it’s probably not a good idea.  Term Life insurance is a far more comprehensive plan. It will cover you (or rather your loved ones) whether you die as the result of an accident, medical condition, or just old age.

So, who should get Accidental Death insurance?

The cost of purchasing Life Insurance does go up as you age and is tied to your current health and medical history. There are a handful of situations that may leave you unable to qualify for traditional life insurance, or make the policy cost prohibitive. Among those who may have trouble securing Term Life insurance are people:

  • living with cancer or other serious health conditions (including obesity, hepatitis B or C and high cholesterol, blood pressure or blood sugar)
  • who have certain criminal records or with multiple instances of DUI or moving violations
  • who need immediate coverage

AD applications ask no health questions – your acceptance is guaranteed.

I’ve heard that some people have both Term Life and Accidental Death, are they just over insured?

It depends. In general, your Term Life insurance will cover your beneficiaries in the event of your death for just about any reason. Adding on AD is a cost-effective option for someone who purchased their Life insurance when their needs, responsibilities or health were different.  It’s also valuable for those who engage in high-risk activities like sports, travel, etc.

Okay, I get it now. But I’m still not sure if I should get it.

The fact is, your insurance needs will evolve over time, just like other aspects of your life. One appealing feature of AD is that it can be purchased before, after or at the same time as Life insurance – from the same company or a different company.   If you’re looking to add potential value without increasing your premiums too much, it’s worth considering.

AD Coverage Just for You