Accidental death is the third leading cause of death in the United States after heart disease and cancer, according to the Centers for Disease Control. (We don’t count COVID-19 in our rankings, as the pandemic appears to be subsiding, thank God.) Does this mean you should consider an accident insurance policy instead of the more traditional life insurance policy? not necessarily.
Some people like the idea of paying for accidental death coverage only—especially young adults, who may take the greatest risk to their lives is an unexpected fatal accident. But the truth is, accident insurance provides only limited coverage, especially when compared to life insurance.
The biggest drawback to an accidental death policy is that it leaves you exposed to a much higher chance that your loved one will not have a claim. According to the Centers for Disease Control and Prevention (CDC), only 6% of all deaths in the United States are due to accidental causes. If she died of a cause in the remaining 94 percent? An accidental death insurance policy will not benefit your family.
Here’s what you need to know about accident death insurance, as well as when you should consider taking out an accident insurance policy versus a life insurance policy.
Accidental death insurance versus life insurance
Accidental death insurance, also known as accidental death and dismemberment or AD&D insurance, is an alternative to term life insurance. As the name suggests, accidental death insurance is designed to protect your beneficiaries if you were to die accidentally — from a car accident, for example, or a workplace injury.
If your policy includes dismemberment coverage, it may also provide some type of living benefit if you are seriously injured, crippled, or lose a limb. Death from disease or natural causes is not covered under accident death insurance, and many accident death policies are generally limited to an amount of up to $500,000.
Term life insurance, on the other hand, protects your loved ones in the event that you die within the period of coverage—generally 10, 15, 20, or 30 years. Your beneficiaries will receive a death benefit whether your death was the result of an accident, illness, or natural causes, unlike accidental death insurance. Additionally, term life insurance is not capped at $500,000 in coverage benefits.
The cost of accident death insurance versus life insurance
Both accident and life insurance are quite affordable, especially when compared to permanent life insurance, and many insurance companies and brokers offer both life and accident death insurance.
However, the two types of policies do not offer the same coverage – so you need to decide how much protection you want for the price you pay.
Let’s do some cost-benefit comparisons if you’re thinking of buying life insurance:
Life insurance
There are two common types of life insurance that are fully underwritten and simplified version life insurance. Both are offered by Haven Life and the following will help you compare life insurance options.
Medically deferred life insurance
Medically insured life insurance policies are often the most affordable type of coverage. These policies take into account your age, lifestyle choices, and personal and family health history to determine your eligibility and rates. Medically written coverage also offers the strongest range of coverage options, from tens of thousands of dollars to many millions.
Thanks to innovations in underwriting, some medical insurance policies—such as the Haven Term policy—can be purchased without a medical exam for a subset of eligible applicants to skip. Once a customer places an order, they will be instantly notified whether they are eligible to skip the medical examination or not.
Keep in mind that it is always important to be honest in the application process. The issuance of the policy or the payment of interest may depend on the answers you give in the application and your honesty.
Medically confirmed life insurance is generally reasonably priced. Below are some examples of the cost of coverage for nonsmokers in good and excellent health for a Haven Term policy, issued by MassMutual or its affiliate CM Life.
Life insurance quotes
Life insurance quotes
| age | sex | health | nominal amount | length of time | monthly installment |
|---|---|---|---|---|---|
| 30 | male | good | $250,000 | 30 | $23.92 |
| feminine | good | $300,000 | 30 | $24.28 | |
| male | excellent | $500,000 | 30 | $29.99 | |
| feminine | excellent | $1,000,000 | 30 | $43.41 | |
| 35 | male | good | $250,000 | 20 | $16.86 |
| feminine | good | $300,000 | 20 | $17.15 | |
| male | excellent | $500,000 | 20 | $20.72 | |
| feminine | excellent | 750 thousand dollars | 20 | $23.13 | |
| 40 | male | good | $250,000 | 10 | $15.40 |
| feminine | good | $400,000 | 10 | $18.42 | |
| male | excellent | $600,000 | 10 | $18.98 | |
| feminine | excellent | $800,000 | 10 | $20.89 |
The estimate is based on rates for eligible Haven Term applicants who are in excellent health. Spreads vary based on ages, health status, coverage amount, and length of term. These rates do not reflect rates for DE, FL, ND, NY, and SD applicants.
Simplified version of life insurance
Simplified problem policies typically require applicants to fill out a short questionnaire in the underwriting process, with a few health-related questions. No medical exam is required to apply and receive a coverage decision.
Because full medical underwriting is not done and so the insurance company knows less about you, these policies are usually more expensive than a medical insurance policy. Why? Generally, the more the insurance company understands about you, the more affordable the coverage will be.
Additionally, with simplified issuance policies, maximum coverage amounts are typically limited to $500,000 or less. (Although Haven Simple now offers no-medical examination policies for up to $1 million.) Here are some examples of the cost of Haven Simple policy coverage, issued by CM Life Insurance Co. Inc., a subsidiary of MassMutual Corporation. Quotes shown are for non-smokers in excellent health.
100% rates without life insurance for a medical check-up
| age | sex | nominal amount | length of time | monthly installment |
|---|---|---|---|---|
| 25 | male | $200,000 | 20 | $14.46 |
| feminine | $400,000 | 20 | $19.77 | |
| 30 | male | $100,000 | 20 | $9.70 |
| feminine | $500,000 | 20 | $22.60 | |
| 35 | male | $200,000 | 15 | $14.28 |
| feminine | $300,000 | 15 | $14.66 | |
| 40 | male | $200,000 | 10 | $20.05 |
| feminine | $400,000 | 10 | $21.64 |
The estimate is based on rates for qualified Haven Simple applicants who are in excellent health. Spreads vary based on ages, health status, coverage amount, and length of term. These rates do not reflect rates for DE, FL, ND, NY, and SD applicants.
Accident death insurance
Accidental death insurance rates are similar to life health insurance for the same term. For example, a 30-year-old woman in excellent health can buy a 30-year, $500,000 accidental death policy starting at $26.45 a month, according to insurance broker Fabric, while that same woman can buy a $500,000 30-year term. . Policy starts at $25.40 per month.
If she died accidentally while her accidental death insurance coverage period was active, her beneficiaries would get the death benefit. However, if she died due to an illness or health problem, the accidental death benefit will not be paid to her beneficiaries. With a life insurance policy, beneficiaries receive a death benefit whether their death is due to a covered accident, illness, or natural causes.
What does accident death insurance cover?
Accidental death insurance generally covers loss of life resulting from accidents involving motor vehicles, bicycles, work-related machinery, falls, suffocation, suffocation, drowning, and fire.
Some incidental policies also cover dismemberment, which means you or your beneficiaries can get damages for loss of vision, speech, hearing, or a limb. (This is not the same thing as a disability income insurance policy, which is designed to replace a portion of your income if you become unable to work for an extended period of time. Learn more about Haven Disability, and get a quote.)
Accidental death and dismemberment policies generally do not cover fatal accidental injuries resulting from surgery or mental or physical illness.
When is accident death insurance the right choice?
Accidental death insurance is easy to purchase because it does not require any medical underwriting. An accident insurance policy may be better than life insurance if you are denied life insurance for health reasons. Cost-conscious consumers may also prefer lower premiums in general and experience higher amounts for accident death insurance than life insurance, even though accident death policies will not pay out until after an accident.
The best thing you can do when determining if AD&D is the right choice is to compare the cost to term life insurance. Make sure you understand how much coverage you get, how much you pay for that coverage, when the coverage ends and what exclusions are in the policy.
Doing so will help ensure that you are getting the best value for yourself – and most importantly, your family.
How does term life insurance work?
Term life insurance provides life insurance coverage for a specified term. In most cases, people choose the length of their term to match the time period in which their loved ones are financially dependent on their income or employment — until the policyholder reaches retirement age, for example, or until their children are older. Classes 10 years, 15 years, 20 years, and 30 years are all popular.
With life insurance, you are covered regardless of whether your death was caused by an accident, illness, or other health problem. If there are exceptions that may prevent beneficiaries from receiving a death benefit, they are generally limited to suicide within the first two years or intentionally failing to disclose material information in the application process (such as a pre-existing condition).
For many people, life and medical insurance is a good value. The premiums are usually affordable, and you have coverage during the years your family needs it most — until the mortgage is paid off, your spouse or domestic partner retires, or your financially dependent children are on their own.
It is also very easy to apply for term life insurance online. Purchasing quality life insurance has become easier in recent times thanks to modern technology. You can apply online for a Haven Term policy and get an instant decision on coverage eligibility.
If a medical examination is required, you will be notified immediately; With Haven Life, you have 90 days to take it. There’s no reason to fear a medical exam, either – when an exam is required, most Haven Life customers find it a simple process.
If you are interested in a non-medical life insurance policy, Haven Simple might be a good option for you. Simplified life insurance generally costs more than an all-medically insured life insurance policy, but it can be a good option for people who don’t want a medical exam.
(However, our legal team would like to remind you that the issuance of any life insurance policy or payment of its benefits is based on your insurability, on your answers to the health questions on the application, and your honesty.)
Find the right one for you and your loved ones
You shouldn’t buy any type of insurance policy until you understand the type of coverage it provides—and in many cases, accidental death insurance won’t provide enough coverage to meet your needs.
Accidental death insurance may be a good option if you are unable to qualify for medical underwriting under a life insurance policy. It may also be a good option if it is the only life insurance coverage you can afford. However, if you are healthy and have an uncomplicated medical history, you will usually get a better value with a medically insured life insurance policy.
Life insurance is valuable to your family and is one of the most valuable gifts you can give your loved ones. For many people, life insurance is a better option than accidental death insurance. An affordable life insurance policy will help provide you and your loved ones with financial protection, regardless of how you passed away.