What is death insurance? This type of insurance provides financial support to named beneficiaries in the event of the insured’s death. Accidental death insurance comes as a single premium policy, often purchased as part of a group policy, but it is more often bundled together as part of a standard life policy. With life insurance, you will receive coverage for accidental deaths as defined in your individual contract — most incidents of accidental death are not included in this kind of coverage.
In general terms, accidental death coverage covers the loss resulting from death of the insured. In the majority of cases, the death will be defined as “accidental” based upon the policy documentation. Policies often specify what specific circumstances are deemed “accidental” under the policy. Death by a specified illness or natural death, for example, would be considered accidental under the coverage. Any death that is due to an act of violence, terrorist activity, theft, robbery, or disaster would also be considered accidental. Any death related to a sporting event or contest, such as football or baseball, would also likely be covered under this type of insurance.
Accidental death insurance policies often specify the types of accidents that are covered. These usually include “drowning and drowning,” “fire” and “accidental discharge of firearms.” Other accidents that would likely be covered include “stone breaking and death,” “being electrocuted,” “being suffocated or entrapped,” “being crushed or killed by an automobile,” and “being met by an explosion, fire, lightning or falling debris.” Specific diseases that are also likely to be covered by this type of policy are listed as well, including “pulmonary cancer,” “cancer of the lung” and “leukemia.”
Who is covered and why? Accidental death benefits are intended to pay for funerals and any other related costs associated with the death. Therefore, the person who is insured is generally the spouse, children, parents or other relatives. If no children are involved, then the nearest family member will usually be paid for the death.
When is the payout due? The death benefit may be paid out for a period of time after the accident. In some situations, the benefits may be paid immediately. Others will be paid over a longer period of time, as decided by the insurance benefits provider.
Who can qualify for accidental death insurance policy benefits? Anyone who is a dependent of the insured will almost always qualify for the coverage. However, non-dependent beneficiaries cannot generally receive the benefits. Anyone who was a dependent during the life of the insured will normally still be covered, even if they are not a family member. Similarly, beneficiaries who are not legally related to the insured can also typically be covered, provided that they can prove that they will receive the death benefits if the insured dies as the result of their disability or death.
There are a number of different types of accidental death benefits available. Some policies will cover dismemberment as well as death. Other polices will only cover death. Of course, the policies will vary in how they define “dismemberment” and “death.” Policies can be tailored to specific risks or to the entire policy framework, allowing the beneficiary to choose between two different plans.
As long as the premiums are paid on time and the beneficiary understands the terms and limitations of the policy, then he will likely be entitled to the death benefit. However, there are situations where this is not always the case. When the insured has a financial stake in another individual’s wellbeing, it can sometimes be more difficult to get the payout. Therefore, it may be more useful for the beneficiary to have a separate life insurance policy that does not require an additional payout to his beneficiaries.