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Does Term Insurance Cover Accidental Death?

Term insurance plans typically covers accidental death as long as it occurs within the policy term. However, specific coverage details may vary depending on the insurance provider and policy.

  • 3,350 Views | Updated on: May 30, 2024

Most term insurance with accident cover policies covers accidental death if the policyholder has opted for an accidental death rider. This rider ensures that if the insured person dies accidentally within the policy term, the death benefit will be paid to the beneficiaries. The coverage amount depends on the specific terms and conditions of the policy.

Key Takeaways

  • Term insurance generally covers accidental death during the policy term if bought along as rider.
  • Accidental death coverage is often included in standard-term insurance policies.
  • Policyholders may need to review their specific policy to confirm accidental death coverage.
  • Coverage for accidental death can provide financial protection to beneficiaries.

What is Term Insurance with Accident Cover?

A term insurance with accident cover policy in India is one of the many benefits you can add to your term insurance plan. It covers predetermined damages specified in the policy agreement, such as amputation, fractures, burns, wounds, or disabilities. Accidental life insurance gives a lump sum payout known as an accidental death benefit to the beneficiary in the case of your demise.

Term Insurance with Accidental Disability Rider

Accidents do not come knocking at your doorstep. However, such unexpected occurrences bring ambiguity, losses, temporary or permanent disabilities, etc., with themselves. Therefore, it is sensible to get term insurance with accident cover rider if you want to gear up for the worst.

In case of an accident that results in disability, a lump sum payment or a monthly income for a certain period is given to you and your loved ones. This period is entirely based on the length of the policy and your financial requirements.

There are two situations for disabilities in an accidental death insurance policy:

Permanent Disability

Suppose you are no longer able to work or take care of yourself or your family due to permanent accidental disability. In that case, the rider benefit is given as compensation in a lump sum amount.

Partial Disability

If you experience a partial accidental disability where you are not completely incapable of taking care of yourself, term insurance with an accidental disability rider benefit pays the compensation amount monthly.

Do You Need an Accidental Insurance Policy?

Accidental death insurance, typically offered as a rider on term insurance with accident cover policies, provides an additional payout to your beneficiaries if you die in a covered accident. While not essential for everyone, it can be valuable for certain individuals facing higher risks or with dependents who rely on their income.

Some factors to consider to determine if accidental insurance is right for you:

High-risk Occupations Or Hobbies

Do you work in a hazardous construction, firefighting, or law enforcement field? Do you regularly engage in extreme sports or high-risk activities? If so, accidental death insurance can offer your loved ones valuable financial support in case of an unfortunate accident.

Dependent Family

Do you have financially dependent children, spouses, or elderly parents? If your income plays a critical role in their well-being, an accidental death benefit can guarantee their financial stability in your absence.

Existing Life Insurance Coverage

Do you already have a term insurance with accident cover policy? If so, check if it includes an accidental death rider. If not, adding one might be cost-effective compared to purchasing a separate accidental death policy.

Alternative Risk Mitigation Strategies

Consider your existing risk mitigation strategies. Do you have good health insurance and disability coverage? If so, this rider is a good option to ensure finances for your family.

Exceptions to Accidental Death Cover in Term Insurance

Even with a term insurance with accident cover rider, certain situations might not be covered. It is crucial to understand these exceptions before opting for this coverage:

Pre-existing Conditions

Injuries or illnesses existing before the policy is purchased or during the waiting period (if applicable) may not be considered accidental, even if they contribute to the death.

Suicide or Self-inflicted Injuries

Accidental death benefits generally exclude death by suicide or intentional self-harm.

War or Civil Unrest

Some policies exclude deaths from war, terrorism, or civil unrest.

Criminal Activity

Death caused by illegal activities like drunk driving or intentional criminal acts might not be covered.

Act of God

Some policies might have exceptions for deaths caused by natural disasters or other ‘acts of God.’

How to Buy an Accidental Insurance Cover for Term Insurance?

To purchase term insurance with accident cover as part of your term insurance policy, you generally have a few options. Here is a step-by-step guide for buying accidental insurance coverage:

Understand Your Needs

Assess your lifestyle, occupation, and other risk factors to determine the amount of accidental coverage you may require. Accidental insurance typically provides a lump-sum payout in case of accidental death or disability, and the coverage amount should complement your overall financial needs.

Select the Term Insurance Plan

Choose a term insurance with accident cover plan that aligns with your life coverage requirements. Most insurance providers offer term plans with the flexibility to add riders or additional coverage, including accidental insurance.

Check Available Riders

Explore the riders or add-on options available with the chosen term insurance with accident cover. Accidental insurance is often offered as a rider, allowing you to enhance your coverage by paying an additional premium.

Review Policy Terms and Conditions

Carefully read the terms and conditions of the accidental insurance rider. Understand the scope of coverage, conditions for claiming benefits, and any exclusions that may apply. This will ensure that you clearly understand what is covered under the policy.

Calculate Premiums

Calculate the additional premium required for the accidental insurance rider. This cost will be added to the base premium of your term insurance policy. Ensure that the total premium fits within your budget.

Fill Out the Application Form

Complete the application form accurately. Provide all necessary information, including your health, lifestyle, and occupation details. Be transparent while disclosing information to avoid any issues during the claims process.

Medical Examination (If Required)

Depending on your age and the coverage amount, the insurance company may require you to undergo a medical examination. This is a standard procedure to assess your health condition.

Payment and Policy Issuance

Pay the premium for your term insurance with accident cover policy, including the accidental insurance rider. Once the payment is processed, the insurer will issue the policy document. Review the document to ensure all details are accurate.

To Sum it Up

Given the unpredictability of life, staying prepared and getting term insurance with accident cover is recommended to be safe rather than sorry later. Nothing can give you better peace of mind than securing your loved ones’ future even after you are no longer there. By considering your individual needs and understanding the exclusions, you can decide whether accidental death insurance is the right addition to your term life insurance policy.

FAQs On Term Insurance With Accident Cover


1

Is accident covered in term insurance?

Yes, accidents are typically covered in term insurance policies.



2

Should we take an accidental rider with term insurance?

It depends on individual preferences and needs, but an accidental rider can provide additional coverage for accidents.



3

What is not covered in term insurance?

Term insurance usually doesn’t cover pre-existing medical conditions, suicide within the policy term, or death due to certain risky activities like participating in war.


4

Who is not eligible for term life insurance?

People with serious pre-existing medical conditions or those engaged in high-risk occupations like deep-sea diving or stunt work might find it challenging to get term life insurance.


5

How do I claim accidental insurance?

To claim accidental insurance, you typically need to notify the insurance company about the accident, provide necessary documentation such as medical reports or police reports, and complete the claim process as outlined by the insurer.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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