When shopping for a life insurance policy, you have likely come across the term ADB, or Accidental Death. This type of coverage comes in the form of a standalone policy or even a rider on your comprehensive term or whole life insurance. So, what is ADB and do you need it?
Let’s take a look at what is, and isn’t, covered by Accidental Death life insurance. We will also see who benefits from these types of policies, and whether buying ADB is right for you.
What is Accidental Death Coverage?
Accidental Death (ADB) life insurance is a more cost-effective option than even term life coverage. It can be purchased as a standalone policy – providing basic coverage against a number of accidents – or even as a rider on a whole or term life policy.
ADB life insurance is much more limited in regards to qualifying events. This means that there are instances in which your death won’t trigger a payout for your beneficiaries. However, Accidental Death coverage is much less expensive than a comprehensive life insurance policy, so it’s still a budget-friendly option for many.
What is Accidental Death?
The main part of an Accidental Death policy, of course, is the accidental death. This covers a number of circumstances in which the insured dies due to an unforeseen and unpreventable accident. Accidental death is the third leading cause of death in the United States.
Causes of death that are typically covered under an accidental death policy include:
- Unintentional falls
- Motor vehicle traffic deaths
- Unintentional poisoning deaths
Of course, this isn’t a complete list and there are caveats to each of these. In fact, the many exclusions of Accidental Death coverage is one of the reasons this type of coverage is so cheap: the insurance companies don’t pay out nearly as often and claims are limited.
What’s Not Covered
Trying to determine exactly which situations are covered under an Accidental Death policy can be difficult. There are plenty of caveats and fine print that will preclude you or your loved ones from receiving a payout. In fact, it may be easier to talk about what isn’t covered.
Here are a few situations which aren’t covered by an Accidental Death policy under any circumstances:
- Illness or disease
- Death during surgery
- Drug overdose
- Death due to old age
- Drunk driving accidents
- Death during a risky activity, such as skydiving or car racing
- Death or injury incurred while playing a sport professionally
- Participation in war
There are also many circumstances which are a bit less clear. For instance, let’s say that you died in a car crash, but it turns out that you had a heart attack while driving which caused (or contributed to) the accident. Even though you were killed in an auto accident – a situation often covered by Accidental Death policies – the insurance company could still deny your claim on the basis of heart disease.
This is just one of many such situations where the answer regarding coverage is, It depends. At the end of the day, it’s important to know that accidental death policies are much, much more limited than comprehensive policies, and it’s a lot harder to actually get an approved claim.
If your loved ones will be impacted financially by your death or severe, an Accidental Death policy probably won’t be enough.
Accidental Death Riders
If you have already decided that a term or whole life insurance policy is the best bet for your family, you will probably find that you have the option of adding an ADB rider. This extra benefit allows you to boost your beneficiaries’ payout if you die (or provide benefits to you if you’re injured but not killed) in an ADB-related incident.
For instance, a term life insurance policy of $100,000 will typically pay out to your loved ones whether you die in an accident or due to something like an illness or disease. However, if you have an optional ADB rider, this will boost your benefit if your death is due to a covered accident. Whereas beneficiaries would have gotten $100,000 following your accidental death, the rider will allow them to receive even more.
Is Accidental Death Life Insurance Right for Me?
Deciding whether to buy accidental death coverage can be tricky. It’s a much more affordable option than term life policies, and costs only a mere fraction of whole life premiums. However, your ability to file a claim and receive benefits will also be much more limited.
If your death (or even a severe injury) could have the potential to financially devastate your family, you should look into Accidental Death coverage as a rider only. You’ll still need to establish a term or whole life policy that will provide benefits to your loved ones, whether you pass away in a tragic accident or simply get ill. That way, you can ensure they are always protected, no matter what.
If have no dependents or debts, particularly if you are young, an Accidental Death policy might be sufficient. It could also cover your final expenses or provide an improved quality of life for your loved ones, were you to be unexpectedly killed in an accident.
While Accidental Death coverage is very limited and doesn’t pay out for many situations, it’s still a good type of policy to have “just in case”. It’s also very affordable, so it might be worth at least considering when establishing your life insurance coverage.
The application for Accidental Death life insurance doesn’t ask any medical history questions and it has a guaranteed approval once your payment clears. So if you’ve had trouble getting term life insurance in the past, an Accidental Death coverage could be a wise decision.
If you have questions about what type of life insurance you should buy, or want to know more about Accidental Death coverage, our licensed life insurance experts are available to answer your questions. Get a complimentary Accidental Death life insurance quote and build a policy that you love.