Many people have a need for life insurance protection but either cannot qualify for traditional coverage or cannot afford expensive premiums. There are also those who simply need supplemental coverage provided by accidental death insurance.
So, are there coverage options other than traditional life insurance?
In certain instances, accident only coverage can be a great option and/or supplement to existing coverage. For those with serious health concerns, challenges in securing life insurance is understandable given restrictive underwriting standards. While guaranteed issue plans are an option, they can sometimes be prohibitively expensive.
The intent of this article, Accidental Death Insurance: Maximum Accident Only Coverage at Minimal Cost, is to provide a basic understanding of accidental death insurance and how it compares to other types of life insurance.
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How Accidental Death Insurance Works
This is a type of life insurance coverage that pays a death benefit if an insured’s death is the result of accidental bodily injury only. This differs from traditional life insurance policies, which pay regardless of the cause of death, limited to policy restrictions.
The primary benefits associated with accidental death coverage is that these policies are extremely affordable and are issued with essentially no consideration of an applicant’s medical condition.
According to the Centers for Disease Control and Prevention, unintentional injuries are the #1 cause of death in people age 44 and below.
Given these statistics, accidental death insurance can be worth considering in addition to traditional coverage.
These policies are typically available to adults until around age 70 and offer death benefits ranging from $50,000 to $500,000, though policy specifics vary by insurance company. Accidental death policies are often guaranteed renewable for the life of the policy.
As with traditional life insurance, accidental death plans also offer additional policy riders, or benefit options, at a nominal extra cost. Specific riders will vary by insurance company but typically include the following.
Accidental Death Riders
Accidental Death vs. Term insurance
It is extremely important to understand the distinction between an accidental death policy and regular life insurance.
Traditional life insurance policies pay a death benefit in the event of an insured’s death regardless of the cause, with certain policy restrictions such as suicide, illegal activity, or fraud.
An accidental death insurance policy will ONLY pay if an insured’s death is the result of accidental bodily injury.
It is extremely important that consumers understand the coverage, benefits, and limitations of the policy they are considering. A comprehensive understanding of accidental death insurance can help to prevent confusion between accidental coverage and traditional “all-cause” life insurance.
Premium Rates for Accidental Death Policies
Accidental death policies routinely have extremely low premium rates when compared to other types of life insurance coverage. In most cases, an individual can purchase a significant amount of coverage for only a few dollars per month. The following illustration provides sample rates for an accidental death insurance policy on a 35-year-old male.
Sample Accidental Death Insurance Rates
Note: The rates illustrated above are for a $200,000 accidental death insurance policy on a 35-year-old male. Policy length may vary by individual insurance company.
Best Candidates for Accidental Death Coverage
In many instances, those unable to secure traditional life insurance purchase accidental death insurance as an alternative so that they at least have coverage in the event of a fatal accident.
However, based on the high number of deaths caused by unintentional injuries and the minimal cost of accidental death coverage, this type of policy should at least be considered by anyone with a need for life insurance coverage.
Accidental death insurance is best suited for those having a need for accidental death coverage at a minimal cost.
Accidental Death Insurance
Dan is a 35-year-old husband and father of two young children, who currently has traditional term life insurance coverage for income protection. Working in the construction industry, he has witnessed several co-workers injured in on-the-job accidents over the years. In discussing options for additional coverage with his insurance agent, Dan learned that a majority of deaths for individuals under age 40 are caused by unintentional injuries. His agent also shared that accidental death insurance can be a great low-cost option. After reviewing his family’s coverage needs, Dan decides to purchase an additional $250,000 accidental death insurance policy. Accidental death insurance will meet Dan’s supplemental coverage needs providing additional security for his family at a minimal cost.
Recommended Accidental Death Companies
Several companies in the marketplace offer accidental death insurance options. The following companies are recommended in our experience based on company ratings, policy options, premium rates, customer service, and other considerations.
3 Steps to Buying Accidental Death Insurance
Accidental death insurance is traditionally extremely simple to purchase since there are routinely no medical underwriting considerations. This type of coverage can be placed in force quickly, with approval times ranging from minutes to a matter of days.
The following provides information related to the process of securing accidental death insurance coverage.
1. Determine Coverage Needs – Determining coverage needs for accidental death can be similar to analyzing needs for other types of life insurance. It is important to consider income replacement requirements and any outstanding debts. Consideration should also be given to existing life insurance policies to avoid over-insuring.
2. Request a Policy Quote – Requesting an accidental death insurance quote can be done online or over the telephone. The only information required is normally the proposed insured’s age and desired amount of coverage. Many consumers are pleasantly surprised at the affordability of these types of policies.
3. Apply for Coverage – Applying for an accidental death policy is an extremely simple process and can be done by phone or email in a matter of minutes. The application traditionally consists of personal data, lifestyle information, premium payment options, and other basic information.
As a final note, it is extremely important that individuals purchasing accidental death insurance understand selected policy features and limitations. Specifically, these types of policies ONLY pay in the event of accidental death.
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James Shiver is the founder of ChoiceLifeQuote.com and a multi-state licensed independent life insurance agent serving the individual family and small-business markets. Dr. Shiver also serves as a university business professor, as well as being an Accredited Financial Counselor®.