Accidental Death Benefit Rider In Life Insurance

What is an Accidental Death Benefit Rider in Life Insurance?

Accidental Death Benefit (ADB) Rider in life insurance is an optional rider that the policyholders can add to their base plan for enhanced coverage of accidental death at nominal premiums.

In simple terms, an accidental death benefit rider meaning that it pays an additional amount if the life assured passes away due to an accident in the time period specified by the insurer.

The Accidental Death cover premiums are paid with the base premiums, and you can get a large ADB rider sum assured at really affordable rates. This rider can be considered an additional accidental death policy that provides the nominee with the additional rider sum assured on top of the base sum assured in case of the policyholder’s death during the policy term due to accidental reasons.

Do I Need to Add the Accidental Death Benefit Rider to Life Insurance?

The need for Accidental Death Benefit Rider in Life Insurance is completely subjective. You may or may not find the need for the accidental insurance coverage in your life. But, this rider provides the nominee with an additional financial benefit in the event of the policyholder’s unfortunate demise due to an accident. With the accidental death policy rider, you can secure more benefit amounts at low premiums and ensure the financial stability of your family in your absence. Your family can use the ADB rider benefit payout to pay for their rent, pay for child’s fees, pay off any remaining loans, and take care of any other financial obligations that might burden your family in your absence.

How Does Accidental Death Benefit Rider Work?

An Accidental Death Benefit Rider provides the nominee with the benefit amount if the policyholder dies due to an accident during the policy term within the applicable waiting period, which is usually 180 days.

Let us understand this with an example:

Suppose Mr A bought a 10-year life insurance policy of Rs 2 Crores life cover and added an accidental death benefit rider of Rs 50 Lacs to the base plan. Now, Mr A suffers a car accident after 4 years of purchasing the policy and unfortunately passes away. The insurer will provide the nominee with the base sum assured of 2 crores on his death at any time, but if he passes away within 180 days of the accident, the nominee will receive the 50 Lacs rider sum assured on top of the base sum assured as an additional benefit.

What are the Benefits of Accidental Death Benefit Riders in Life Insurance?

Here is a list of all the benefits of ADB rider that you can avail of by adding the rider to the base plan.

• Additional Coverage: An Accidental Death Benefit Rider provides the policyholder and their family with an additional benefit amount which will provide monetary help to the nominee in case of the policyholder’s unfortunate death during the policy term.

• No Medicals Required: You do not need to submit any medical exam to add an Accidental Death Benefit rider to the base plan and can easily enhance your plan by adding this rider without any hassles.

• Save More by Spending Less: By adding the ADB rider to the base plan, you can increase the benefit amount your family receives in case of your accidental death at nominal premiums. The Accidental Death life insurance premiums for this rider are much lower than the premiums of a new policy for the same rider sum assured.

• Peace of Mind: An Accidental Death Benefit Rider provides the policyholder with the much-needed peace of mind that their family will be financially secure in the event of their unfortunate death and can take care of their financial needs.

What Do Insurers mean by Accidental Death?

To be fair and clear, insurers reveal explicitly what kind of deaths could be labelled as accidental deaths under an accidental death insurance policy. The policy text includes the precise meaning, which controls the circumstances when the accidental death benefit or accidental death benefit rider payment should be made.

In most cases, a death is an accident if it:

• Is the result of an external, violent, and visible event

• Happens suddenly and without intention

• Is a consequence of the accident, and the death happens within a certain number of days, usually 90 to 120 days

Here are some of the typical accident-related events that most accident policies would cover:

• Traffic and road accidents

• Accidents at work or industrial accidents

• Injuries caused by a fall and injuries caused by the impact of an external force

• Death because of natural disasters like earthquakes or floods in cases where the death is a direct result of the event

Usually, accident situations like these are covered by the accident death cover attached to the rider and form part of the wider accidental insurance coverage.

How is Accidental Death Rider Different From Term Life Insurance?

While both ADB rider and term insurance plans provide the nominee with a benefit amount in case of the policyholder’s untimely death, there are a few differences between the two.

Inclusions of Accidental Death Benefit Rider

The list below shows some major points that an accidental death policy will typically cover as well as provide a wider scope of protection through an accident insurance plan:

• Car or Traffic Accidents: A death benefit rider for accidental death is financially compensating the family if the car or any other traffic accident is the cause of the policyholder's death. Such accidental death coverage is a supplement to the total accidental insurance coverage.

• Airplane Crashes: When a person dies due to an airplane crash, it would be one of the benefits paid by the accidental death benefit and gives an opportunity of getting more protection from accidental death insurance policy with enhanced accidental insurance coverage.

• Falls: Any fatal consequences from falling down accidentally would be included in the ADB rider. It is not only an accidental death policy but also an accidental death life insurance to be used as an accidental death cover in such circumstances.

• Firearm Accidents: Your accidental death benefit rider will be the first one to come to your rescue if the death in question is caused by an unforeseeable firearm accident. In fact, this is a great addition to your accidental death insurance policy and a sound way to look after your family's secure financial future.

• Fire Injuries: The accidental death benefit will only be released if the insured dies due to the resulting injuries sustained in a fire. Such accidental death cover is a very significant part of comprehensive accidental insurance coverage.

Exclusions of Accidental Death Benefit Rider in Life Insurance

There are certain conditions under which an active life insurance policy with the ADB rider included in the base plan may not payout, and they are:

• The ADB rider will not provide cover if the policyholder attempts suicide or inflicts self-harm onto themself.

• Deaths due to pre-existing illnesses, self-inflicted injuries, suicides, or accidents that happen while under the influence of alcohol or drugs are normally not covered.

• If the policyholder participates in extreme sports such as paragliding, skydiving, or other dangerous activities.

• If the policyholder has engaged in criminal activities or breaks the law

• The maximum age limit for the ADB rider cover has expired.

• If the policyholder is actively participating in wars of any kind.

Is Accidental Death Benefit Rider Right for you?

This rider is generally recommended for individuals who commute frequently, work in high-risk environments, or engage in dangerous occupations. However, financial advisors often suggest first ensuring that your base life insurance coverage is sufficient to cover your family's future needs, as increasing the base cover protects against all causes of death.

Wrapping it Up!

The ADB rider or the Accidental Death Benefit Rider in Life Insurance is the easiest way to secure a large sum assured over the base amount for your family. You can consult your financial advisor to understand the details of the ADB rider and its exclusions within each plan as per your needs. You can then compare life insurance plans online to see the companies that offer this rider and purchase the plan most suitable for yourself.

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