An accidental life insurance policy will pay a handsome death benefit to its beneficiary, if the insured dies due to an accident, within a specified period of time. It is an inexpensive way of obtaining coverage for either yourself or someone in your family. With the keyword here being “inexpensive”. But why is accidental life insurance so inexpensive? This article will explain just that.
The main reason for accidental life insurance policies being so inexpensive is statistics. These statistics say that accidental death makes up less than 5% of all deaths in the United States. Insurance companies know this. To them, this means that their chances of loss are minimal. As a result, they can afford to offer inexpensive premiums for this type of policy.
But this comes with a catch. The policy is subject to certain “death criteria”. As you may have already guessed, the beneficiary only collects the benefit if the death of the insured is a direct result of the accident.
Unfortunately, some beneficiaries have a difficult time trying to prove this. Death can occur several weeks after an accident and for numerous reasons, a lot of which can be other than the accident itself. These include medical complications or surgical procedure risks. But the beneficiary has to prove this. And this makes accidental life insurance policies riskier when compared to traditional life insurance policy.
Don’t forget that insurance companies have deep pockets and can afford to pay fancy lawyers. If the accident is questionable, you can be sure that they will try to fight it. This is very important and you should know it before buying accidental life insurance. Additionally, you should also compare rates with a traditional term life insurance policy. It might be a better choice for you and your family, even if the premiums it comes with might be slightly higher.