Does Term Insurance Plans Cover Accidental Death
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The key thing to remember about a term insurance plan is that it does not have a maturity benefit. This means there is a payout to the nominees only in the case of the insured individual’s death. However, it is still prudent to have a term insurance policy due to the host of benefits it provides, whether you are the head of a family or a young individual planning one.
The best part of a term insurance policy is that even though it is a pure protection plan, it can be made more solid by adding the right kind of insurance riders#. A term insurance rider# means an added benefit to your basic term insurance plan. It is a kind of an upgrade, and because it provides you with an additional benefit, you need to pay a higher policy premium. But some riders, such as the accidental death insurance policy rider, are worth every additional rupee.
Accidental Death Benefit In Term Insurance
The uncertain nature of life makes humans vulnerable to death due to several causes. Accidents are one of such common causes of death, and a term plan with accidental benefit is a way to take care of that possibility financially.
If the insured individual passes away in an accident, the term insurance policy payout will be increased if it has the accidental death benefit. For instance, if the base coverage of the term insurance is ₹ 50 lakhs and the accidental death insurance rider# coverage is ₹ 15 lakhs, the nominee of the insured will receive ₹ 65 lakhs in all in the event of death due to an accident.
It is essential to note that even if the insured’s death is due to a cause other than an accident, the base sum assured will be paid. That is ₹ 50 lakhs in the above example. So a term plan with accidental benefit does not take away anything from the term insurance policy.
Are Accidents Covered In Term Insurance?
Yes, accidents are covered in a term insurance policy. A typical term insurance policy will pay the sum assured, irrespective of the cause of death, whether it is health-related or due to an accident.
However, the advantage of opting for the accidental death benefit rider is that it increases the amount of money your family receives if the cause of death is an accident. This benefit can be taken with only a slight increase in the premium. Hence, it turns out to be a relatively affordable option compared to increasing the basic term insurance coverage without this rider.
Conclusion
However, accidents are unforeseen events that can come knocking at anybody’s door. Hence, it is wise to opt for the accidental death benefit rider when buying a term insurance policy. This is because even those who do not work in dangerous conditions or travel frequently can often find themselves in a horrific accident. It is a cautious move to make on your part to add this rider to your term insurance plan.
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