Accidental Death Insurance
Accidental death insurance will typically be combined with dismemberment insurance and is most often offered in conjunction with a credit card, mortgage or bank account. With that said, it is extremely important that you do not confuse this type of insurance with a standard life insurance policy. This is especially true if you are considering relying solely on accidental death and dismemberment insurance to provide a lump sum for your dependence upon your death.
Accidental death insurance policies are actually extremely easy to understand and also relatively inexpensive. The basis of this type of policy is that if you die accidentally, your beneficiaries will be provided with a lump sum of money. This is also true if you were to lose a limb, your sight, or anything other body part that would severely affect the day-to-day running of your life. However, with that said, there are numerous industry experts who believe that accidental death insurance does not provide any real value.
The first question you might like to ask yourself is how likely it is that you will die from an accident. A study conducted by the Centers for Disease Control and Prevention in 2006 claimed that in excess of 120,000 people died from unintentional injuries that year. Age is also a contributing factor, and it is believed that as a 35-year-old non-smoking male, you are four times more likely to die in an accident than from heart disease prior to the age of 45. For women of the same age you are twice as likely to die in an accident as opposed to breast cancer. However, once you have reached the age of 45 it is far more likely that you will die from natural causes rather than an accident.
An accidental death and dismemberment insurance policy will typically have a standard pay out for both death and loss of limbs. You will also find that the vast majority of employers will offer some form of accidental death insurance. The benefit of any specific work based plan will typically be tailored to meet your employer's needs. However, in general, these types of policies will have benefits ranging from $20,000 up to $500,000.
It is extremely important that you read and fully understand the fine print of this type of insurance policy. The majority of accidental death insurance policies will only pay benefits if your death was a direct result of the injuries you sustained in an accident. If you do die in an accident and meet all the criteria then your policy will pay out the full amount of coverage. As for dismemberment insurance, benefits will only be paid if the loss of a limb or your eyesight occurs within a certain period of time after your accident. This is generally within three months with most policies.
There are also certain exceptions that you should be aware of with most accidental death insurance policies. No benefits will be paid if your death or dismemberment comes as a result of - physical or mental illness, suicide or attempted suicide, taking illegal drugs, intentionally injuring yourself, war or any injuries that are a result of armed combat, being diagnosed or treated for a physical or mental illness, and driving a vehicle while intoxicated.
You will also find that accidental death insurance policies will not cover any emotional trauma, but they do often offer counseling for your dependents. This is actually a fairly significant additional benefit, as the death of a loved one is likely to leave family members emotionally distressed. This is why many accidental death insurance policies are specifically geared towards helping a surviving spouse get back on their feet and start living life again.
You are typically able to purchase accidental death and dismemberment insurance through your workplace, and it is usually offered as part of a group life or health plan. Your employer will generally offer a level of coverage that is based against your individual salary. You will also find that a work related accidental death insurance policy will offer guaranteed acceptance and there is no need to provide details of your medical history. Accidental death insurance is also available through credit card offers, and is normally underwritten by major insurance companies.
If you are working in a potentially high-risk job then you may wish to consider purchasing accidental death insurance, although you are likely to find that your premiums are fairly expensive due to the nature of your work. It is also vitally important that the benefits of an accidental death insurance policy exactly match that of your basic life insurance. In other words, if you currently have $100,000 in life insurance it is considered good practice to ensure that you also have $100,000 in accidental death insurance coverage. The fact that the majority of these types of insurance policies also offer dismemberment insurance is definitely a plus. If you are in a particularly dangerous line of work, then there are numerous accidents that can severely affect your overall ability to work.