What are Accidental Death Benefits?

An accidental death benefit is a life insurance policy provision that may pay your survivors additional money, up to twice the face value of your insurance should you die in a sudden accident. Sometimes accidental death benefits only refer to accidents that you have while working that result in death. Other times, an accident can be defined more loosely and might cover any type of accident that results in an early death.

Accidental death benefits may be combined with provisions for loss of a limb or sight. This is called an accidental death or dismemberment benefit. Loss of a limb, perhaps only in the work setting, might result in a payout of some of your insurance. In some cases if more than one extremity is lost, the total value of the insurance policy is then available to the person. In most cases, if the full insurance money owed is claimed, the person is not entitled to further claims on that insurance. Should the person die from the same accident, his or her survivors would only get the full value of the insurance and not additional money for dismemberment.

Since accidental death benefits can vary it’s very important to read the fine print regarding exactly what you are paying for. Further, accidental death benefits may not be paid if you work in high-risk occupations. For instance, if you drive highly flammable materials for a living, and while you are working you have a truck accident resulting in loss of life, this may not be considered an accidental death, but an occupational death. This doesn’t mean your survivors may not receive your insurance, and perhaps additional compensation from your employer, but a privately owned plan not acquired through your company may not pay for accidents occurring on jobs that are considered hazardous.

Some accidental death benefits are called double indemnity, since the payout for an accident resulting in death is frequently compensated for with twice the value of the insurance policy. Again, it is extremely important to read all the material and any possible exclusions before buying insurance. Since an accident would be defined as something totally unexpected, your survivors may not be financially prepared for your death if you do not have adequate insurance. It may therefore be prudent for you to find the most generous accidental death benefits available through an insurance company.