What Is an Accidental Death Benefit Rider?
An accidental death benefit rider is an additional coverage rider that you can purchase in addition to your term plan at extra cost. It provides an additional life insurance payout to your family if your death occurs as a result of an accident. This extra coverage can help your family deal with sudden costs, challenges, etc. After all, accidents can be difficult on families and this rider provides some form of protection. This rider covers death as a result of a road accident, plane crash, injuries from a fire, or death from falls among others as per the policy terms. This rider can be easily added to your plan. Many people take this rider for an extra sense of security, and to have the peace of mind that their loved ones will be safe.
How Does the Accidental Death Benefit Rider Work?
An Accidental Death Benefit Rider is a policy extension you can add to your life policy. It allows nominees to receive money if you die by an accidental death. For the rider to work, there must have been only an accident; in other words, the death must not be due to illness or something else. The death also must occur within a defined period of the accident. This is an extra benefit for the family to give them more financial help under such circumstances. For example, if someone has a life cover policy that is ₹50 lakh, and an accidental rider that is ₹20 lakh, the family would get ₹70 lakh if the death were accidental. Without that rider, they would just get the original ₹50 lakh. The additional amount can help them track daily expenses, children or any other important expenses after their loved once there.
Who Should Buy an Accidental Death Benefit Rider?
An Accidental Death Benefit Rider is additional coverage that you may add to a life insurance policy. If the insured person dies as a result of an accident, the nominee will receive additional funds. This amount is in addition to the insurance amount under the base life insurance policy. Many people choose to add this rider to their plan. It depends on their lifestyle, work, or how much protection they want. Here's a simple list of people who may find an additional rider useful.
People Who Travel Often
Those who travel a lot—by road, air, or train—may be more exposed to accidents. This rider can offer extra cover for such people.
People Working in Risky Jobs
Some people work in places where accidents can happen, such as construction sites, factories, or with heavy machines, and they may want extra protection through additional cover.
People with Dangerous Hobbies
Accidents are more likely if someone rides a bike, hikes in the mountains, or plays adventure sports. This rider with additional sum assured adds more support for their family.
Main Earning Members in a Family
If a person is a breadwinner for their family, an accident can create big problems. This rider helps provide more money to the family if covered incident occurs.
People Who Want Extra Cover
Sometimes people want more coverage but don't want to pay huge amounts for a new policy. This rider gives extra cover at a small added cost.
Does term insurance cover accidental death?
Accidents as a cause of death are covered in term insurance plans. However, did you know that you can purchase riders as well to increase the death benefit of your life insurance plan with nominal extra premium? The option of rider or add-on may be bought additionally, so that you can widen the scope of a life insurance plan. However, to avail additional coverage benefits, the premium may also increase. Though the premium is quite affordable as compared to the coverage it offers, it is essential that you plan your budget and needs before buying an add-on.
Riders, if taken with term insurance, increase the overall death benefit of the life insurance plan. Riders like the accidental permanent partial/total disability rider, provides coverage for accidental death along with partial and total disability cover. Let's understand it with the help of an illustration:
Ravish, a 35-year-old purchased a term insurance plan (without riders) for 20 years tenure for a sum assured of Rs. 40 lakhs. After 5 years of buying the plan, Ravish passes away in a motor accident. The family receives the assured death benefit of Rs 40 lakh under the policy, presuming all due premiums have been paid.
Meera, a 40-year-old, bought a term insurance plan for 15 years that offers a death benefit of Rs 40 lakh. Meera also decides to opt for the accidental death benefit rider with nominal extra cost along with her base term insurance plan, that offers an additional rider benefit of Rs. 15 lakh if death is due to accident.
After 10 years of purchasing the plan, Meera passes away in a car accident. The nominee receives a total death benefit of Rs 55 lakhs (base death benefit plus rider benefit).
If this rider was not opted for, then the death benefit would have been only Rs 40 lakh.
The base plan of term insurance covers accidents as a cause of death. However, if you purchase rider along with the plan, it gives you the leverage of an extended benefit.
Additionally, the accidental death benefit rider premiums and the benefit paid out are also eligible for tax rebates under Section 80C of the Income Tax Act, 1961. Also, the sum assured received under the rider is exempt from tax, under section 10(10D) of the Income Tax Act, 19k61. However, the deductions and exemptions mentioned above are subject to provisions stated in the Act.
Inclusions of the Accidental Death Benefit Rider
An Accidental Death Benefit Rider is something you can add to a term insurance plan. It gives extra money to the family if the person dies due to an accident. The rider covers many types of accidents. Here are some examples of what is usually included:
Road Accidents
If someone dies in a car crash or any road accident, this rider usually covers it.
Airplane Crashes
The rider covers death in a plane crash.
Falling Down
If a fall causes serious injury and death, it is normally covered under this rider.
Fire Injuries
If a fire causes injuries that lead to death, this rider generally covers it.
This rider is designed to help families when a sudden death occurs due to an accident. It adds more benefit to the basic insurance plan. The types of accidents covered may differ from one company to another. Always check the details before choosing.
Exclusions of the Accidental Death Benefit Rider
An accidental death benefit is an extra amount that may be paid if someone dies because of an accident. However, there are some cases where this benefit is not given. These are called exclusions. They mean the company will not pay in these situations. Here are the common cases that are not covered:
Self-harm or Suicide
If a person dies because they hurt themselves or tried to take their own life, the benefit is not paid. This applies even if the person was not in their senses or had taken alcohol or drugs.
Flying in Risky Ways
If someone dies while doing activities like skydiving or parachuting, it is not covered. Only flying as a normal passenger on a regular plane is allowed.
Doing Something Illegal
The benefit is not given if the person dies while breaking the law or doing something wrong on purpose.
War or Fights
If death happens during war, riots, or fights between groups, it is not covered.
Risky Sports or Activities
If a person dies while doing very risky sports like mountain climbing, boxing, horse racing, deep-sea diving, or motor racing, the benefit will not be paid.
If the death happens in any of these risky or special situations, the accidental death benefit may not apply.
Why Should I Buy Accidental Death Benefit in Term Insurance?
An accidental death benefit rider is an extra cover added to a life insurance plan. If the person covered dies in an accident, this rider gives extra money to the nominee. It helps provide more financial support during a difficult time.
Purchasing an accidental death rider is a straightforward experience. There are very few documents or long forms to complete. In most cases, it can be added at the same time you buy the life insurance policy.
A lot of people purchase this rider to have at least some additional coverage. It gives them peace of mind in knowing their family will receive extra assistance if something happens to them due to an accidental event.
Documents Required for Claiming the Accidental Death Benefit Rider
A death claim is when someone informs the insurance company that the life assured under a policy has passed away. To process the claim, some basic documents are needed.
The person making the claim must give one or more of the following documents:
- Duly filled and signed Death Claim Form
- Original Policy Bond
- Original Death Certificate
- Certificate of Cremation or Burial
- Discharge Form
- Certificate from the Hospital or the Last Medical Attendant
- Legal proof of entitlement to the claim (if the claimant is not the Nominee or Assignee)
- Employer’s Certificate detailing medical leave availed (if applicable)
- Copies of the First Information Report (FIR), Police Inquest Report, and Post-Mortem Report (in case of accidental death) and newspaper cutting ( If any)
- Nominee KYC and Bank account details/proof
- Nominee Pan Card/Form 60
- Any other documents as may be requested, if required
Conclusion
Accidents as a cause of death have become a rising concern. It is not uncommon to hear and read news of accidents. Now that your question ‘does term life insurance cover accidental death’ is answered, you need not panic and worry. Nobody knows about tomorrow, but one can definitely keep their guards on for any unforeseen and unfortunate events that may happen in future. Purchasing a term plan with sufficient cover is one such safeguard. If you haven't purchased a term insurance plan yet, consider investing now.
Frequently Asked Questions
Can a person purchase accidental death benefits in term insurance online?
Yes, an individual can purchase an Accidental Death Benefit with a term insurance plan online. This is an additional feature that provides additional death benefits to the insured's nominee if death occurs because of an accident. Many insurance companies provide this product on their websites at extra cost. You can select it while buying the plan. The steps are simple—choose the plan, add the benefit, and complete the payment. Always read the terms and conditions carefully before adding any extra cover to your plan.
What are the various accidents that a person can claim insurance against?
The complete list if incedents against which accidental cover is provide dislisted in the brouchure and the policy terms and conditions. Some of the commonly covered scenarios include:
- road accidents
- falling at home
- fire burns
- electrical shocks
- injuries at work
Additionally, many insurance plans cover accidents while travelling, or for those conducting daily activities. People should check coverage for each specific plan.
Is suicide also considered an accidental death?
Suicide is not considered an accidental death. An accidental death is defined as a sudden event that causes death in an unexpected manner (car accident, falling down a staircase). The vast majority of accidental death insurance plans will almost always exclude suicide. Some life insurance plans do impose restrictions on suicide (such as waiting periods); however, it varies greatly depending on the terms of the specific Insurance company. You should always refer to your policy to identify what is covered and what is excluded.
Can I purchase accidental term insurance for my parents?
Yes, you are allowed to buy an accidental term insurance plan for parents if they meet the basic criteria of the insurance company. An accidental term insurance plan pays the policy benefit under the plan to the nominee if the parent dies due to an accident during the policy period. Some plans will require a health check or additional documentation. You will also have to show that you have obtained their consent. terms and conditions can vary from company to company, so it is important to check the items before purchase.
What happens if I don’t pay the unpaid premiums?
If you miss your monthly premium, insurance companies will usually give you some additional time, referred to as a grace period. If you do not pay your premium by the end of the grace period, the plan may stop working altogether. A lapse in coverage means that your policy no longer has any active benefits. You may also lose the premium money you have put into it in some cases. In some situations, you could resume your policy by reviving it, but there may be a charges / fee, or the insurance provider would require new documentation.
What is the difference between a death benefit and an accidental death benefit?
The death benefit is the money that is paid if the person dies during the policy period from any cause, like an illness or accident under a life insurance plan. The accidental death benefit is an additional payment made only if the death was caused by an accident under specific riders. Some plans offer this as an additional rider at extra cost. So, if a person had both, the nominee could get the death benefit under the base plan plus the additional accidental benefit if the death was due to an accident under the rider. Both provide financial benefits to the nominee.
How much can be the amount of the accidental death benefit?
The amount of the accidental death benefit is determined by the insurance company and the policy selected. Some individuals may receive an additional amount, equal to the base plan, while others may receive a set amount. The amount is determined at the time of purchasing the plan.
Are accidents covered in a term insurance plan?
Yes, most term insurance plans cover death caused by an accident. If the insured dies as a result of an accident during the policy period, the insured's nominee will receive the sum assured as part of the regular death benefit. It is important to read the details of the policy, so it is clearly understood what is covered and what is not covered under the plan.
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