All Insurance companies have a wide variety of modifications that can be made to their basic policies which increase coverage amounts and circumstances for which you are covered. These modifications are called Riders. They ride alongside the basic coverage.
Many companies automatically include certain riders in their policies. Others are optional and can be purchased.
One of the more popular riders available is the Accidental Death Rider. Let’s look at the details of this rider and discuss eligibility. We will also explain if you are a perfect candidate for this add-on.
And of course, you’ll want to know the cost, and which companies provide the best version of this coverage at the best value.
What is the Accidental Death Rider?
The Accidental Death Rider is designed to provide benefits beyond the normal life insurance payout.
The basic life policy is designed to pay a benefit upon your death. Your beneficiaries gain whatever coverage amount you purchased.
The Accidental Death Rider changes this basic coverage.
The second level of benefit is paid to the beneficiaries if your death is accidental in nature rather than through disease or natural causes.
Some companies will refer to this as a Double Indemnity coverage. Using this terminology explains the way this payout will work.
In most cases, this rider will double the death benefit.
What Qualifies as Accidental Death?
Accidental death is death strictly due to an accident, but there are exclusions. Death during war or participation in illegal activities are excluded. Death due to hazardous hobbies are excluded as well.
Hazardous hobbies can vary by insurance companies. Because of this, you should discuss with our agent when applying, make sure you are open with the insurance about any hobbies you regularly participate.
As an example, skydiving and scuba are often part of excluded activities.
How Does the Payout on Accidental Death Claims Work?
For example, if you have a $100,000 policy with this rider, your family will receive $200,000 is there is an accidental death.
Let’s say Joe buys a $250,000 life policy with a $500,000 accidental death rider. Joe dies in a car crash on the way home from work. His family will receive $250,000 in life benefit along with $500,000 in accidental death benefit for a total of $750,000 in payout.
Death does not have to be immediate for an accident either. Most companies will provide coverage if the accident causes death within 90 days up to 12 months.
Many Accidental Death Riders add a dismemberment benefit. If an injury dismembers a limb or causes the loss of bodily function, a portion of the benefit will be paid to the insured while they are still living. Because this is a common addition, you may see policies list AD&D as a potential rider. AD&D are abbreviations for Accidental Death & Dismemberment.
Another modification is Family Accidental Death. This will protect the family of the insured from accidental death. If a spouse dies with this coverage, 50% of the coverage will pay in a death benefit. If a child dies, then 10% of the coverage will be a death benefit.
Who Is Eligible?
Eligibility for Accidental Death is easy. If you qualify for a term or permanent life policy, you will qualify for this rider. The only exception is age. Most life companies will not allow this rider if you are older than 65 or 70. Other than age, you can qualify.
Who Is The Accidental Death Rider Best For?
Accidental death benefits are a great fit for everyone. Most individuals die from disease rather than accidents. Accidents are so sudden and tragic they feel much more common than death by disease.
According to the Heart Foundation, 1 out of every 7 people will die from a heart related illness. Compare this to motor vehicle accidents. Only 1 out of every 112 people are likely to die in vehicle accidents. In 2013 only 131,000 out 2.5 million deaths were accidental.
However, accidents do happen.
If you work around potentially hazardous situations where the risk of accidental death is higher, you should consider. For example, manufacturing or construction trades, where you work around heavy machinery, are perfect examples where accidental death needs to be considered. This coverage is an excellent way for you to dramatically increase coverage without doubling your price.
The other reason you should consider is travel. If you travel frequently with work, you are exposed to a greater increase of accidental death. Any trucking profession or salespeople who spend significant time in their cars, should consider accidental death. Your odds are much higher than the average American for a fatal car accident because of your time on the road.
Accidental Death Rider Cost
Considering the extra coverage given, the accidental death rider is incredibly affordable. You are basically able to double your coverage payout without doubling your premium.
The cost is minimal. A term policy for a 40-year-old man could expect $10-$15 per month per every $100,000 in coverage. If you are in your 20’s that costs can be less than $5 per month for this rider.
Best Life Insurance Companies for the Accidental Rider Cost?
We’ve gathered the most competitive and stable companies together to offer you the best value for your insurance dollar. The companies below rank highest in the benefits and cost of their Accidental Death Rider.
|Company||A.M. Best Rating|
|Ameritas (FLX Living Benefits Products)||A+|
The Accidental Rider is an important option to consider when applying for life insurance.
It can be placed on any type of life product. Make sure to discuss this option with your agent. If you are in the risks categories for this coverage, ask your agent to help you find the best fit for your insurance needs.
Contact us today to talk through all the other options life insurance can provide for you.