Accidental death benefits: what are they?

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Accidental death benefits can pay additional money to survivors, up to twice the face value of insurance if death occurs in a sudden accident. These benefits may be combined with provisions for loss of limb or sight, but it’s important to read the fine print and exclusions before purchasing insurance.

An accidental death benefit is a life insurance policy provision that can pay additional money to your survivors, up to twice the face value of your insurance if you die in a sudden accident. Sometimes accidental death benefits only refer to accidents you have while working that result in death. Other times, an accident can be more loosely defined and can cover any type of accident that results in an untimely death.

Accidental death benefits may be combined with provisions for loss of limb or sight. This is called an accidental death or dismemberment benefit. Losing a limb, perhaps just in the workplace setting, could result in a payout from your insurance. In some cases, if more than one limb is lost, the full value of the insurance policy will be available to the person. In most cases, if the full insurance money owed is claimed, the person is not entitled to further claims on that insurance. If the person dies from the same accident, the survivors of the accident would only get the full value of the insurance and no additional dismemberment money.

Since accidental death benefits can vary, it’s very important to read the fine print about exactly what you’re paying for. Also, accidental death benefits may not be paid if you work in high-risk occupations. For example, if you handle highly flammable materials for a living, and while working you are in a truck accident that results in loss of life, this may not be considered an accidental death, but an occupational death. This doesn’t mean your survivors won’t receive your insurance, and perhaps additional compensation from your employer, but a privately owned plan not purchased through your company may not pay for accidents that occur in jobs that are considered hazardous.

Some accidental death benefits are called double indemnity, since the payout for an accident resulting in death is often offset by twice the value of the insurance policy. Again, it is extremely important to read all the material and possible exclusions before purchasing insurance. Since an accident would be defined as something totally unexpected, your survivors may not be financially prepared for your death if you do not have adequate insurance. Therefore, it may be prudent for you to find the most generous accidental death benefits available through an insurance company.

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