Life Insurance vs. Death Insurance: What Is the Difference?

Life Insurance vs. Death Insurance: What Is the Difference?
death insurance cost

Navigating through the world of insurance can sometimes be tricky, especially if you are a beginner. Two of the most confusing insurance policies are life insurance and accidental death and dismemberment (AD&D) insurance.

At a glance, these two policies may seem the same, but they are different and protect you from different catastrophes.

There are some instances where you may need both, but having one is fine for most individuals. The right policy for you will depend on your lifestyle and budget. For instance, death insurance cost may vary significantly from life insurance costs depending on your age and health.

But most importantly, you need to understand the difference between the two policies so that you don’t end up with a life insurance when you actually needed death insurance and vice versa.

In this post, we discuss some of the critical differences between life insurance and accidental death insurance.

What Is Accidental Death Insurance

According to the CDC, accidental death is the third leading cause of death in the United States after heart disease and cancer. This means accidents kill more Americans than diabetes, stroke, and respiratory diseases!

Accidental death insurance is designed to provide coverage if you die or become incapacitated as a result of an accident.  If you are incapacitated, the policy will only pay out a predetermined amount specified in your policy document.

However, if you die, your beneficiary will receive the full payout amount specified in the policy document. Typically, you can think of accidental death insurance as a limited form of life insurance.

In most cases, the insurance is offered as a life insurance policy rider or supplemental insurance. This means that it is commonly purchased as part of a life insurance product, but you can still buy it as a separate policy.

When purchased as a life insurance policy rider, the policy pays out an additional benefit to your beneficiary if you die in an accident.

Keep in mind that payout can only happen if the cause of your death is established to be an accident. Sometimes, what most of us may term as “accidental” may not be covered under the accidental death insurance policy.

For instance, your beneficiary won’t receive a payout for death caused by a drug overdose, or car accident if you were driving while drunk.

Do you need a medical exam to get an accidental death insurance policy?


Since accidental death insurance doesn’t cover natural causes of death, you do not need a medical exam to get one. In fact, insurance providers won’t even ask you any questions related to your health.

With the help of Insurance Master, you can apply and get approved for accidental death insurance coverage within 24hours. You can even get this policy at 70 and keep it until you hit 80!

How much does accidental death insurance cost?


Depending on the amount of coverage you wish to purchase and the benefits you will enjoy, an accidental death insurance can cost as little as $60 per year.

However, keep in mind that the relatively low cost of this insurance policy also means that it doesn’t provide much benefit. It is generally effective if you are looking for something basic to help out your loved ones if you die unexpectedly.

What Is Life Insurance?


Life insurance is much more comprehensive than accidental death insurance. A life insurance policy will cover your beneficiary in the event of your death regardless of the cause. There are different types of life insurance, and each one of them is different.

A term life insurance policy will only cover you for a specified period, which could be 10, 20, or 30 years. Your beneficiaries can only file a claim if you die before the end of the policy term.  On the other hand, a whole life insurance policy doesn’t have time limits.

However, purchasing a life insurance policy doesn’t necessarily mean that your beneficiaries will be compensated automatically upon your death. Take time to read your policy document to understand exceptions.

For instance, some insurance companies won’t cover death by suicide for a certain number of years after purchasing the life insurance. Also, it is good to mention that life insurance doesn’t pay for injuries or incapacitation, as is the case with accidental death insurance.

Do you need a medical exam to get a life insurance policy?


Typically, when you purchase life insurance, you will be required to undertake a medical exam. A nurse or any other health practitioner will administer the exam.

The primary purpose of the exam is to help the insurance provider determine if you are eligible for coverage. If you have significant health problems, the company could increase your monthly premiums significantly or reject to insure you altogether.

Guaranteed acceptance life insurance doesn’t require you to undertake a medical exam.

How much does life insurance cost?


Insurance companies consider a lot of factors when determining the cost of life insurance. Going by the current market rates, a healthy person aged between 18 and 60 can expect to pay a monthly premium of between $68 and $75 for a $250,000 life insurance policy.

However, this cost varies significantly depending on where you fall on the spectrum, your general lifestyle, and overall health.

Contact Insurance Master today and speak to our experienced team of licensed insurance agents for all of your insurance needs.

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