Accidental Death Life Insurance to Cover Death and Dismemberment

If you’re looking to protect your family, you probably already have level term cover. Accidental death life insurance is normally taken out as a rider, but can also form a stand-alone policy in its own right. The difference between term and accidental life insurance is that full coverage pays out in a variety of different situations. Accident insurance cover should only be taken out as an extra, never as a replacement. The coverage it provides is, by definition, far more limited.

What is Accidental Death Life Insurance?

Your accident insurance policy pays out a cash lump sum to your estate if you die or are dismembered as a direct result of an accident. If you do suffer a dismemberment, you won’t receive the full death benefit. You’ll normally receive a “scheduled” payment that is specified in the policy agreement.

Taking Out Accident Life Insurance when You’ve Got Level Term Coverage

Most people take out accidental life insurance because it is an inexpensive source of protection. This means that you can get a far higher cash lump sum for a low monthly premium. It’s important to appreciate that it’s not a substitute for level term or whole life insurance as an accident isn’t the only cause of death. It is useful if, for example, your job involves a lot of road travel.

Cost of an Accident Insurance Policy

  • Saga insurance provides £25,000 of coverage to both men or women aged between 50 and 89 for £4 per month. There is no coverage for dismemberment.
  • Swinton insurance offers a £60,000 payment to both sexes for just £4.98 per month. They even cover dangerous occupations and hobbies, but you must be aged between 25 and 70.

Limitations of Accidental Life Insurance Policies

Aside from the fact that you’re covered against fewer potential eventualities, you’ll tend to find that the terms and conditions used by insurers tend to be very similar. For example, if your intoxication resulted in your death or dismemberment, your accidental death life insurance policy won’t pay out.

You may also find that there are further restrictions in terms of age or in relation to high risk hobbies, such as bungee jumping, rock climbing, hang gliding and other pursuits. Anything that dramatically increases the likelihood of death or being dismembered may be excluded.

You’re also likely to discover that your death or loss of a limb or eyesight must happen within three months of the accident taking place. Always scrutinize the policy schedule for the specifics.

Pros and Cons of Accident Insurance Cover

The main benefit of accidental death life insurance is that it is really cheap and any cash lump sum is likely to be considerably larger than would be payable from level term coverage. The negatives are that your death must occur entirely as the result of an accident.

If a heart attack causes you to crash your car, an accident insurance policy will not pay out. You’ll normally find that it is added as a policy rider, but you can take it out as a standalone policy. Accidental life insurance should never been taken out as an alternative to a term or whole of life insurance policy.