Purchasing a life insurance policy today is not at all unlike buying a car. There are so many options possible to customize your policy to meet very specific needs and preferences.
This is typically done by adding life insurance riders to a basic policy, which provide the extra features that will make the plan the right fit for you and your beneficiaries.
One of the most popular riders is an accidental death rider. When you add it to your life insurance policy, it increases the benefit if the cause of death is due to an accident.
While most of us think in terms of illness when it comes to death and life insurance, accidents are also a frequent cause. And in some age groups, death due to accidents is even more likely than illness. That’s what makes an accidental death rider so valuable.
What is an Accidental Death Benefit Rider?
An accidental death rider is an optional provision that you can add to your life insurance policy, whether it’s a whole life or term life policy. Its purpose is to increase the death benefit should you die due to an accident, rather than an illness.
The importance of this type of benefit is often underestimated. When a person dies due to an illness, there are often months or even years before death occurs. But, accidental death tends to be sudden, leaving little or no time to prepare in advance. Since the shock of a sudden death can be greater than with one that’s expected, the financial needs of those left behind can be even greater.
For example, an accidental death rider may add a “double indemnity clause” to your policy. That means the death benefit will double if you die of an accident. A policy that will pay a $500,000 death benefit if you die from an illness will pay $1 million if the cause of death is an accident.
How do Accidental Death Riders Work?
One of the complications of an accidental death rider is the specific definition of death due to an accident.
If someone is killed suddenly in a car crash, the implications are clear. The cause of death is certainly accidental.
The complication comes in situations where a person sustains injuries in an accident, but doesn’t die immediately. For example, in this case, the same person is involved in a car accident and dies from complications of the accident 12 months later. If the accidental death rider in his policy puts a limit on the amount of time that passes between the accident and death, the additional death benefit may not be paid.
Just as an example—since all life insurance companies have different provisions in this regard—if the company limits the interval between the accident and the time of death to 120 days, the additional death benefit will not be paid if the death occurs one year after the accident.
What an Accidental Death Benefit Rider Covers
As a general rule, an accidental death rider will apply whenever death is caused by something other than an illness.
- Fatal accidents.
- Wrongful death.
- Deaths caused by car or traffic accidents.
- Deaths caused by airplane crashes.
- Falls that cause injuries that result in death.
- Most workplace related incidents.
- Death due to fire related injuries or smoke inhalation.
- Death due to firearm accidents.
What an Accidental Death Benefit Rider Does Not Cover
As you might expect, an accidental death rider does have exclusions, and the list can be surprisingly long.
Below is a list of accidental death rider exclusions you can expect to find in a typical policy.
But, the specific provisions will be different from one policy to another, and from one company to another.
- A self-inflicted injury, done intentionally.
- A disease that is the ultimate cause of death is either the direct or indirect result of an injury
- Death that occurs in the commission of a felony.
- Death as a result of physical or mental illness.
- A death caused by taking a medication that is either administered by, or prescribed by a licensed physician, or if an over-the-counter medication is taken as directed.
- Death due to a combination of alcohol and drug consumption.
- Death due to participating in anarchy or insurrection.
- Loss of life due to war or service in the military.
- Intentionally ingesting poison or inhaling gas, unless done while performing the regular duties of employment.
- Death due to an excluded cause, like piloting a private aircraft, skydiving, deep-sea diving, or other high-risk activities.
- Death in connection with a high-risk occupation specifically excluded by the rider.
Advantages of an Accidental Death Rider
In many cases, accidental death occurs suddenly. An accidental death rider can provide a much larger death benefit to help cover an event that was totally unpredictable. The larger death benefit will give the beneficiaries extra time and money to adjust to the sudden loss.
This is a consideration that needs to be taken seriously. When most people take a life insurance policy, they generally assume it’s in preparation for an event that’s far in the future.
That will give them time to accumulate additional funds, raise their children, pay off certain debts including a mortgage, or fund their children’s college educations. Since an accident typically involves either a sudden death or a near sudden death, the insured will have less time in life than anticipated. The additional death benefit will be a form of compensation for that lost time.
Some accidental death benefit riders also provide certain living benefits. For example, the rider may include coverage for paralysis, the loss of vision in one or both eyes, the loss of use or dismemberment of one or both hands, one or both feet, or a combination of one hand and one foot.
Should You Add an Accidental Death Rider to Your Life Insurance Policy?
An accidental death rider is a way to get substantially more coverage—as much as twice the base policy amount—at a much lower cost than paying for a base policy twice as large. If the additional cost of the rider is low enough, adding it to your policy can be a wise choice.
An accidental death rider is often recommended for younger people. This is because death due to accidents is more prevalent at certain age levels than death due to illness. You may want to consider adding the rider if you’re in your 20s or early 30s.
At the opposite end of the spectrum, people over 60 years old may also want to consider adding the rider due to the increased potential of falls and other accidents. However, some insurance policies do limit accidental death riders to certain ages, such as 65. It’s a detail you need to investigate with the insurance company providing your policy.
There are many different riders available with life insurance, and each has a wide variety of premium costs and provisions. It’s best you don’t navigate that potential minefield alone. As life insurance brokers, we not only understand the life insurance industry, but we work with dozens of companies. This gives us the ability to provide you with the company and policy that will have the provisions you’re looking for, at a premium cost you can afford.
This can be especially important if you are looking to purchase your first life insurance policy, and especially if you have a young family. While most consumers look for the least expensive policy, it’s equally important to get a policy that has the protections your family needs. We’re here to help you do exactly that. Put our experience to work for you, and that will take the stress out of the process. And, don’t worry, you won’t pay anything more for our services than you would if you purchase the policy directly from a life insurance company.
*While we make every effort to keep our site updated, please be aware that “timely” information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.