As the name suggests, a term insurance plan is a pure life cover plan for a defined tenure. If the life insured passes away during the policy tenure, the nominee of the life insured receives a death benefit. One of the widely asked questions is, "does a term life insurance cover accidental death". The answer to this question is, Yes. A range of causes of death are included in the term insurance plan, and accidental death is one of them. Let us know more about the plan.
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 need 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 cover¹. 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.
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 1. Also, the sum assured received under the rider is exempt from tax, under section 10(10D) of the Income Tax Act, 1961. However, the deductions and exemptions mentioned above are subject to provisions stated in the Act.2
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 safe guard. If you haven't purchased a term insurance plan yet, consider investing now.
Reference:
1 https://www.insurancedekho.com/life-insurance/term-insurance/riders/accidental-death-benefit#:~:text=3.,the%20Income%20Tax%20Act%2C%201961.
2https://incometaxindia.gov.in/communications/circular/circular-2-2022.pdf
BJAZ-WEB-EC-02379/23
An ISO 9001:2015 
