Accidental Death Life Insurance

Buying life insurance is a wise and a smart choice. Many life insurance packages exist and when it comes to choosing life cover to suit one’s needs and pocket, one is spoilt for choice. One of the most common life insurance covers is accidental death life insurance. Most insurance companies offer accidental death insurance cover, and upon shopping around, one can get a best deal. Most people are faced with choosing between standard life cover and accidental death life cover.

What is accidental life insurance and how does it work?

As the name purports, accidental death life insurance cover is a type of life insurance where payments are made in the event that death is solely caused by an accident and not by something else. Considering that there are numerous causes of death, like old age and illnesses like cancer, amongst others, this life cover is very limited in offering protection to one’s beneficiaries after death. Where death for instances is caused by other complications other than an accident, the insurance company will not pay any benefit.

Chances of one dying from an accident are slim in most cases, therefore risk is also low. Accidental death life cover is therefore the cheaper life insurance cover when compared with standard life insurance cover.

When one for instance is involved in an accident and is hospitalised, and later on develops some health complications, the insurer will not pay out immediately or automatically. If the person dies as a result of medical negligence in hospital, the insurer will not pay a benefit to the deceased’s beneficiaries. The reason for this being that the cause of death is not solely the accident, but other factors that would have come into play.

Furthermore, what is also taken into consideration is the amount of time one lives after the accident in order for one to receive a benefit. If for instance one stays in the hospital for more than a month a payment is likely to be forfeited. Another example would be if one is a live five years and more after the accident, they are most likely not to receive a benefit.

Most accidental death insurance packages would make a standard payment if the accident resulted in loss of limbs. A different criterion determines how much would be paid out if one loses a limb. The information on when a benefit payment would be made in the event of losing limbs is normally detailed in the policy document.

Difference between standard life cover and accidental death life cover

Accidental death life cover only provides for payment of a benefit if death is a result of an accident. Accidental death from extremely dangerous sporting activities is usually excluded and not covered. Standard life insurance cover on the other hand covers all manner of death, irrespective of the cause. Due to the fact that death is a certainty for everyone, standard life insurance premiums are higher as risks that one is going to die are much higher and certain. Chances however that one would die as a result of an accident are lower, and the risk too is lower. As a result, the accidental death life insurance premiums are lower. Due to lower premiums, most people opt for accidental death life cover than standard life insurance cover.

Chances of one dying from an accident are much lower than one dying from cancer, old age, kidney failure and heart attack, especially in the modern era. As a result, standard life cover comes recommended.