Term Life Insurance Articles
How Accidental Death Benefits Work In Term Life Insurance
2010-10-29
Term life insurance coverage is one of the most popular life insurance policy options available on the market. A term life policy meets the needs of many people, especially individuals and couples with children who are concerned about caring for their family in the event of an accidental death or a death from an unforeseen illness. Term life insurance is often the best choice for those with young and growing families because it allows individuals to purchase the highest amount of coverage at the lowest cost. Because coverage in the case of an unforeseen accident are often of prime importance to those purchasing a term life insurance policy, it is important to understand how accidental death benefits work within any specific policy.
Before exploring the specifics of how accidental death benefits typically work, it is important to understand the basic structure of term life insurance coverage. Term life insurance differs from permanent life insurance in that is covers the insured for a set period of time. If the insured dies during the policy's set time period, his or her beneficiaries receive the full benefit of the insurance policy. If, however, the individual outlives the insurance term, the policy expires and the person receives nothing. For this reason, term life insurance is much more affordable than permanent life insurance due to the insurer's lowered risk. Some term life insurance policies offer a guaranteed renewal, without consideration of medical condition, at the end of the policy's term, while others do not. The way that the end of the term is handled is unique to each individual term life policy and should be understood prior to purchase.
How accidental death benefits work in a term life insurance policy is also unique to individual policies. All term life insurance policies pay out to beneficiaries in the case of accidental death, although never in the case of suicide. However, the amount that is paid out differs between policies. Some policies include a multiplier for accidental death as a standard feature. Policies that include a multiplier typically pay either double or triple the benefit amount in the case of accidental death. Policies that do not include such a multiplier as standard feature often offer such a multiplier as a rider. When included as a rider, the insured pays a higher premium to add additional accidental death benefits to a regular term life insurance policy.
Because each term life insurance policy is unique and key policy provisions, rider options, and insurance policy premiums can vary widely between policies, it is important to conduct thorough research and speak with your insurance agent in-depth before purchasing term life insurance coverage.
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Term life insurance coverage is one of the most popular life insurance policy options available on the market. A term life policy meets the needs of many people, especially individuals and couples with children who are concerned about caring for their family in the event of an accidental death or a death from an unforeseen illness. Term life insurance is often the best choice for those with young and growing families because it allows individuals to purchase the highest amount of coverage at the lowest cost. Because coverage in the case of an unforeseen accident are often of prime importance to those purchasing a term life insurance policy, it is important to understand how accidental death benefits work within any specific policy.
Before exploring the specifics of how accidental death benefits typically work, it is important to understand the basic structure of term life insurance coverage. Term life insurance differs from permanent life insurance in that is covers the insured for a set period of time. If the insured dies during the policy's set time period, his or her beneficiaries receive the full benefit of the insurance policy. If, however, the individual outlives the insurance term, the policy expires and the person receives nothing. For this reason, term life insurance is much more affordable than permanent life insurance due to the insurer's lowered risk. Some term life insurance policies offer a guaranteed renewal, without consideration of medical condition, at the end of the policy's term, while others do not. The way that the end of the term is handled is unique to each individual term life policy and should be understood prior to purchase.
How accidental death benefits work in a term life insurance policy is also unique to individual policies. All term life insurance policies pay out to beneficiaries in the case of accidental death, although never in the case of suicide. However, the amount that is paid out differs between policies. Some policies include a multiplier for accidental death as a standard feature. Policies that include a multiplier typically pay either double or triple the benefit amount in the case of accidental death. Policies that do not include such a multiplier as standard feature often offer such a multiplier as a rider. When included as a rider, the insured pays a higher premium to add additional accidental death benefits to a regular term life insurance policy.
Because each term life insurance policy is unique and key policy provisions, rider options, and insurance policy premiums can vary widely between policies, it is important to conduct thorough research and speak with your insurance agent in-depth before purchasing term life insurance coverage.
