Everything You Need to Know About Accidental Death Benefit
Most people get a life insurance plan to protect their finances from medical conditions or untimely death. To ensure you get a plan that caters to your lifestyle needs, InLife offers the option to add insurance riders like Accidental Death Benefit. This feature allows policyholders to customize their plans with more specific coverage and get an additional payout in case of death due to an accident.
Do you need ADB with your life insurance? How does this type of rider work? Keep reading to learn more about this insurance rider benefit before you decide.
What is an Accident Benefit Rider?
First, what is an insurance rider? A rider is an optional add-on to an insurance policy, so the policyholder receives additional coverage or benefits beyond the basic policy terms. This feature allows greater customizability for those with specific needs.
An Accidental Death Benefit (ADB) rider is one of many optional add-ons to a life insurance policy. This rider provides an additional payout on top of basic life insurance benefits if the insured person dies due to an accident.
The ADB rider offers additional financial protection to the standard death benefit of a life insurance policy. It helps families manage the unexpected loss of a loved one due to an accident.
This rider is a good choice for individuals who want to ensure their loved one’s financial security in the event of an accident. Anyone faces some level of risk for accidents, but this is beneficial for those whose professions or lifestyles expose them to higher risks, such as professionals in hazardous jobs, frequent travelers, or people engaged in extreme sports.
How Does Accidental Death Benefit Rider Work?
The accidental death benefit rider is a supplement to a life insurance policy. It covers deaths caused by accidents covered by the policy.
An ADB comes with additional costs, increasing your life insurance policy’s overall premium.
With additional cost comes increased value. With this rider, if the insured dies due to a covered accident, the insurance company pays an extra benefit to the beneficiaries, usually doubling the base policy amount depending on the coverage.
It’s important to note that the ADB covers only accidental death or injury, which typically includes car accidents, drowning, slips, falls, and machinery-related fatalities. Deaths due to natural causes, illnesses, suicide, alcohol-related incidents, drug overdose, and war, as well as participation in high-risk activities (unless stated otherwise) are excluded.
What is an example of the accidental death benefit?
The Accident Death Benefit can be added as a rider for a variety of InLife’s life insurance plans, such as:
Let’s say Michael purchased the Resilience insurance plan and added the Accidental Death Benefit rider. After some time, he gets into an accident that takes his life. Since he has ADB on top of his life insurance, his beneficiaries will receive his life insurance benefit plus the rider’s sum insured.
What are the Benefits of Having an Accidental Death Benefit Rider?
Is it worth it to avail of an accidental death benefit? Here are the potential benefits of having an Accidental Death Benefit rider:
1. Increased Financial Protection
The accidental death benefit rider provides additional financial security for the insured’s family. If the insured dies from an accident, their beneficiaries receive extra funds on top of the benefits from the basic insurance plan.
They may use the benefits to help cover funeral costs, outstanding debts, and daily living expenses. By adding more funds for the beneficiaries, this rider helps prevent financial struggles after a sudden loss.
2. Affordability
Riders add specific coverage and/or benefits to a standard life insurance policy with relatively minimal costs. Without purchasing an entirely new policy, the policyholder can enjoy accidental death coverage on top of their life insurance.
3. Peace of Mind
For those in high-risk occupations, frequent travelers, or individuals engaging in potentially dangerous activities, having an accidental death benefit rider provides reassurance.
Individuals who are regularly exposed to high risk—for example, those who work in construction or mining, frequent travelers, or spelunkers—inevitably worry about their safety and the financial security of their loved ones.
With an ADB rider, they can go to work or engage in risky hobbies with relatively lower worries. You know that your family will receive an extra financial cushion no matter what happens. This assurance offers invaluable peace of mind.
What are the Cons of Having an Accident Benefit Rider?
Accident Death Benefits can be a great supplement to life insurance. However, there are a few considerations to see if an ADB is the right addition to your policy.
1. Limited Scope of Coverage
It’s important to remember that ADB covers only accidental deaths. So, if the insured passes away due to illness or any other cause besides an accident, the beneficiaries cannot claim the payout from this rider.
2. Additional Cost
All riders come with additional costs. So, while you are adding value to your insurance policy, be prepared to have your overall premium increase. Although the additional cost is relatively affordable, it’s wise to consider whether you can afford the monthly or quarterly fee.
3. No Standalone Policy
You can only avail of the Accident Death Benefit Rider when you add it to an existing life insurance policy. Plus, not all insurance policies are eligible for this rider.
This means that individuals who want accidental death coverage but do not have a life insurance policy must first purchase one.
Does Your Insurance Plan Need a Rider?
An Accidental Death Benefit rider is a valuable addition to a life insurance policy for individuals who want extra financial protection in case of accidental death. It ensures that beneficiaries receive an increased payout, providing them with the necessary financial support to handle unexpected expenses.
Work with a trusted life insurance company in the Philippines to find the right insurance plan and rider to protect your health and finances. If you’re interested or would like to learn more about InLife’s riders, don’t hesitate to contact us. Our Financial Advisers will guide you through our insurance products.
