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An accidental death benefit rider is an optional feature that you can add to your basic life insurance policy for an extra fee. If you pass away in an accident, like a car accident, a slip and fall, or a drowning, it gives your beneficiary an extra amount.
The accidental death benefit normally equals or exceeds the face value of your insurance policy. The beneficiary would receive $200,000 if you were to pass away in an accident and you had a $100,000 accidental death benefit rider on your $100,000 life insurance policy, for instance.
This rider does not, however, provide coverage for every accident. What constitutes an accidental death is subject to tight definitions and exclusions by insurance providers. For instance, some common exclusions are:
- Death caused by illness, disease, or suicide
- Death caused by war, terrorism, or illegal activities
- Death caused by intoxication or drug abuse
- Death caused by hazardous sports or hobbies
- Death that occurs more than a certain period after the accident (usually one year)
Moreover, accidental death benefit riders often expire at a specific age, such as 60, 70, or 80. This is due to the fact that as you age, your risk of dying in an accident increases.
So, who should consider adding an accidental death benefit rider to their life insurance policy? This rider may be suitable for people who:
- Working in or near potentially hazardous situations
- Drive more than usual or travel further for work
- Have dependents on them for support
- would like to enhance their coverage without getting a physical
However, before you decide to purchase this rider, you should also weigh the costs and benefits. Some factors to consider are:
- The extra cost for this rider that you must pay
- Versus other causes, how likely it is to pass away in an accident
- Your current life insurance's suitability as protection
- Access to and cost-effectiveness of alternative insurance options for accidental death and limb loss
