According to the CDC, accidents are the third leading cause of death in the United States after cancer and heart disease. In fact, they are the #1 cause of death among adults aged between 25 and 44.  Therefore, it makes a lot of sense to carry an insurance policy that would cover such deaths.

That is why we have accidental death and dismemberment (AD&D) insurance policy.

The policy is designed to provide basic coverage against a number of accidents. It is an excellent option for individuals who work in potentially hazardous occupations or engage in risk sports or hobbies.

Accidental death insurance policy will only provide coverage in case you die or suffer dismemberment of a body organ as a result of a covered accident.

In this post, we discuss everything you need to know about accidental death insurance and whether it is a good option for you.

Understanding accidental death insurance

Typically, accidental death insurance pays a lump sum benefit to your designated beneficiary or estate if you die due to a covered accident. Unlike life insurance, death insurance doesn’t pay benefits for death caused by illnesses.

If you are involved in an accident and don’t die but become incapacitated, you will receive living benefits. The amount of money you receive in such a case largely depends on the type of injury and the policy terms.

For instance, your AD&D insurance might pay up to 50% of the coverage amount you purchase if you lose a body part such as a foot, hand, limb, or sight in one eye and 100% of the coverage amount if you lose two body parts.

The coverage amount you can get depends on the limits set by insurance providers or employers that offer AD&D insurance as part of the workplace benefit.  Most insurance companies provide death insurance policies with coverage amounts ranging from $37000 to $250,000.

What is accidental death?

The primary part of this insurance is “accidental death.” In this case, the term accidental is used to refer to a wide range of circumstances in which the insured party may die or suffer incapacitation due to unforeseen or unpreventable events.

Some of the causes of death that are usually covered under the policy include car accident deaths, unintentional poisoning, and unintentional fall deaths. However, there are caveats that you need to be aware of while shopping for accidental death insurance.

For instance, the policy doesn’t cover suicidal deaths. Other exclusions include illnesses, heart attack, cancer, acts of war, infectious diseases, and adventure sports such as scuba diving, misuse of alcohol or drugs, and intentional/deliberate accidents.

Are there any additional benefits?

Some insurance companies will pay additional benefits if you were wearing a seatbelt during an accident that led to your injury or death. Some benefits may also be provided to help beneficiaries complete their education.

Legal, counseling, and financial advising for designated beneficiaries can also be added benefits for children and a surviving spouse, if any. Keep in mind that these options may vary significantly from one insurance company to another

Is accidental death insurance right for me?

Deciding whether accidental death insurance is right for you can sometimes be tricky. Since it is a much more affordable option than life insurance, some people often want to substitute life insurance with accidental life insurance, which isn’t a good idea.

Generally, if your death or severe injury could have the potential to devastate your family financially, then you should consider purchasing this insurance as a rider on a life or health insurance. This means you will still need to buy a term or whole life insurance policy to secure the financial future of your loved ones. That way, you can always be sure that you are protected.

However, accidental death insurance might be sufficient to protect you if you have no dependents or debts. It could cover your final expenses in case you are killed unexpectedly in an accident.

One thing you must keep in mind while making a decision is that accidental insurance is somehow limited and will only cover you in specific circumstances.

How much does accidental death insurance cost?

Typically, rates for accidental death insurance tend to be relatively lower than the rates for traditional life insurance because its coverage is only limited to accidents. In most cases, employers offer AD&D insurance as part of workplace benefits.

Generally, the cost of AD&D insurance premiums is tied to the coverage amount you purchase. For instance, monthly premiums might start at $5 for every $50,000 in accidental death coverage from some providers. Since rates vary greatly from one insurer to insurer, take time to shop around for the best offer.

At Insurance Master, we care about you and want to help you find the best AD&D insurance rate on the market. Contact us today to speak to one of our licensed insurance agents and let us take care of all of your insurance needs.