Does Term Insurance Cover Accidental Death?

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Does Term Insurance Cover Accidental Death?

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  • 29th Oct 2021
  • 267

Does Term Insurance Cover Accidental Death?


It’s a fine morning, and you’re commuting to work. It is a regular task for you to follow the same route to your workplace with the same travellers. However, meeting with an accident is entirely unpredictable. Thankfully, you purchased a term plan for your family’s safety and the knowledge that your family’s aspirations can continue in your absence is all we can gain solace in – in case such an unfortunate incident happens.

Accidental death either gives your family a higher sum assured (sometimes 2x cover) or you can get covered for disability and can get a waiver on paying future premiums if disabled and have no source of income. Therefore, an accidental death cover in term insurance provides you with an additional layer of protection.

Term Insurance

Given the abundance of information on how you can ensure your loved ones’ safety and build sufficient funds for them, term insurance appears to be the ideal approach. This will enable them to continue their lifestyle and live comfortably even after you are no longer around.

A term insurance plan is a form of life insurance policy that covers you for a certain period. It can last up to 85 years or 5-25 years in the case of a short-term policy. If you pass away during the tenure, your beneficiaries are entitled to a death benefit under the policy’s provisions. Also, this plan enables you to include additional benefits in the form of riders to guarantee your loved ones’ future security.

Accidental Death Cover in Term Insurance

An accidental death insurance policy in India is one of the many additional benefits that you can add to your term insurance plan. It covers some 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 an accidental disability 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
  • If you are no longer able to work or take care of yourself or your family due to permanent accidental disability, the rider benefit is given in a lump sum amount as compensation.

  • 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.

Find Out If You Need an Accidental Insurance Policy

You must understand the additional benefits you should add to your term insurance to manage your finances effectively. Though everyone should opt for accidental life insurance, it becomes necessary to work in hazardous and life-threatening work environments, commute daily to work, etc.

Exceptions to Accidental Death Cover in Term Insurance

Before relying on an insurance policy, you should remember that your loved ones are not eligible for accidental death benefits if you due to:

  • Adventure sports
  • Driving under intoxication
  • Drug overdose

To summarise, we do not know what the future has in store for us. Given this unpredictability, staying prepared and getting an accidental death cover in term insurance 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’re no longer there!

- A Consumer Education Initiative series by Kotak Life

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