What is Accidental Death Life Insurance? Its Pros & Cons, and Cost?

Thang Truong
Thang Truong
Updated on:

Accidental death life insurance is also referred to as accidental death and dismemberment insurance. It allows certain benefits to go to a beneficiary if a death happens from an accident. Below we’ll look more in-depth at these benefits, what some of the product features are, and who should consider it.  

What is Accidental Death Life Insurance?

Accident death or accidental death and dismemberment insurance is a type of insurance that specifically covers you in case you die in an accident or become somehow paralyzed or disabled in an accident.  

Technically, many companies don’t consider it a type of life insurance.  Often, people use this product to supplement an existing policy, whether it is a term life insurance or whole life insurance or universal life insurance policy. Yet in some cases, you can find these policies listed as a type of limited life insurance.   

How accidental death life insurance works is fairly straightforward. You will get an amount paid out to your beneficiaries if your death is solely the result of an accident. Policies may also pay out certain amounts of the benefit, sometimes called a living benefit, if you are somehow disabled or paralyzed in an accident, such as loss of limb.  

>>MORE: Is Life Insurance With Living Benefits Worth It?

Many policies also pay out double or triple if you are injured or killed on a carrier vehicle, like a bus, train, airplane, taxi or ferry.   

Additionally, a huge benefit to these plans is that they often don’t have medical exams and won’t turn you down for a health-related reason. You also typically cannot be turned down because of the profession you have. Often, there are no long forms to fill out and you can get coverage quickly. That beats the waiting period that is common for guaranteed acceptance policies. So if you cannot get a full life insurance policy due to being high risk, this is a solid option.  

Many companies require you to meet certain age ranges, however. For example, AIG offer this life insurance product to those of 18 to 80 years old. So that’s at least a very wide range.        

Pros and Cons

To get an idea of if this product is right for you, below is a look at the pros and cons.

Pros of Accidental Death Life Insurance:

  • You can have peace of mind that coverage will be provided to your beneficiaries in case you die in an accident.
  • These policies tend to come with living benefits, meaning a certain amount is paid out if you become disabled from an accident.
  • These products tend to be extremely affordable, often costing several dollars per month.

Cons of Accidental Death Life Insurance:

  • These policies may not meet your financial goals. For instance, if you want cash value out of your life insurance, you will want to look into permanent life insurance types or cash value life insurance.
  • More traditional life insurance policies often have riders that do that same thing as accidental death and dismemberment policies. For instance, you might find an accidental death benefit rider, which provides more of a payout if your death is from an accident. Riders can be an additional cost or might be included in the policy.  

Who is Accidental Death Life Insurance For?

There are many situations where this is a good product to add on to a life insurance policy or carry independently:

  • You travel often and you want the peace of mind of knowing your loved ones are taken care of if something happens during your travels.
  • You want the peace of mind that your loved ones can get added benefits if the unforeseen happens.
  • You have a profession or hobby that tends to be on the risky side. 
  • You live in an area with a high risk for traffic accidents, like a major city.

These are just a few examples. There are many situations that could put you at risk, and if you feel you might be affected by them, you may want to consider accidental life insurance.  

How Much Does Accidental Death Life Insurance Cost? 

This is one of the most affordable options out there. Farmer’s states that this product tends to begin at around $4.50 per month for every $100,000 of coverage.

We got another quotes for a 42-year-old man with $50,000 in accidental death policy coverage. It costs about $60 per year or $5 a month.

Final Thoughts

Accidental death life insurance covers your loved ones in case you die of an accident. It can also provide benefits to you if you become disabled or paralyzed as the result of an accident. These products tend to be very cost-effective and are often layered on top of more traditional life insurance policies.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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