Extra Payout on Accidental Death: What to Know

The only certain fact about life is that it is uncertain. Mishaps can happen anytime, to anyone. So, it is advisable to invest in risk protection plans that cover you and your dependents against various uncertainties in life. One of the straightforward ways of doing that is by buying a term insurance policy. It provides a lump sum payout if the policyholder dies during the policy tenure. It is highly affordable (low premiums). However, what you might not know is that you can increase the payout amount by buying an accidental death benefit rider.

Read more
Get ₹1 Cr. Life Cover at just ₹411/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
Tax Benefit
Upto Rs. 46800
Life Cover Till Age
99 Years
8 Lakh+
Happy Customers

*Tax benefit is subject to changes in tax laws. *Standard T&C Apply

** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines

Get ₹1 Cr. Life Cover at just ₹411/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
View plans
Please wait. We Are Processing..
Get Updates on WhatsApp
By clicking on "View plans" you agree to our Privacy Policy and Terms of use

What is this rider and how it can offer added protection to your family? Find all the information in this article. 

What to Know About Extra Payout on Accidental Death

The accidental death rider is crucial because it addresses a total irreparable loss - the loss of the family's breadwinner. The policyholder's dependents have to bear the emotional pain along with financial strain in case of his/her death due to an accident. Medical emergency expenses are already a huge expense, but if they turn fatal, then the entire family will have to face losing the life of its loved one as well as the future income. The crushing impact of this double jeopardy of medical costs and the permanent loss of income due to the loss of a breadwinner is lessened by the use of the rider that covers accidental death.

How Accidental Death Benefit Can Help You Get Extra Payout?

The accidental death benefit rider comes with several benefits, some of which are mentioned below:

  • You can have peace of mind that you are protected against accidents of all sorts.
  • Depending on your insurer, you can get a higher accidental death payout in addition to the normal sum assured.
  • The premiums for this rider are constant throughout the policy tenure.

We are sure you will understand this better with an example. So let's take one:

Sunil bought a term insurance plan with Rs.50 lakhs as a sum assured. He also purchased an accidental death benefit policy add-on. This rider will offer an extra Rs.10 lakhs if Sunil passes away due to an accident. However, Sunil would have to pay an extra amount to avail of this benefit. 

So let us assume that the yearly premium payment excluding the rider is Rs.10 thousand. Now let us assume Sunil needs to pay Rs.800 extra every year to avail of the accidental death benefit rider. In that case, he needs to pay Rs.(10,000 + 800) = Rs.10,800 per annum. 

Paying the premium amount of Rs.10,800 per annum will provide a cover of Rs. (50 lakhs + 10 lakhs) = 60 lakhs if he passes away due to an accident.

So, you see - Sunil simply increased 10 lakhs in protection simply by paying Rs.800 yearly. 

Exclusions to Accidental Death Benefit Rider

This rider comes with many exclusions. That implies that deaths due to certain circumstances, such as:

  • Death through alcohol/drug overdose
  • Self-inflicted injury, suicide
  • During employment in the armed forces
  • Riots
  • Adventure sports like bungee jumping
  • Civil commotion
  • Involvement in an aviation or aeronautical operations-related accident
  • War
  • River rafting
  • Scuba diving, etc.

Additionally, there are limitations on the age at which you can avail of the benefits provided by the rider. For example, the rider cannot apply to the policyholder after they reach 75 years. Also, the insured cannot avail the rider once he/she reaches 65 years of age.

Are You Eligible Extra Payout on Accidental Death?

This rider is usually advisable for people whose work either involves frequent travel or those who work in dangerous conditions.

However, accidents are unavoidable situations that can knock on anyone's doors. Thus, it is wise for everyone to select the death benefit rider in the event of an accident when purchasing a term plan. This is because even those who do not work in hazardous conditions or travel frequently could encounter a devastating accident.

Summing It Up

Accidents can happen anytime and are almost impossible to foresee. However, what is possible is to equip yourself with policies designed to look after your loved ones if god forbid something happens to you in the future. Keeping that in mind, we have tried our best to explain the concept of extra payout on accidental death in this article. Make sure you understand it properly and make an informed decision.

Written By: PolicyBazaar

Term insurance articles

Recent Articles
Popular Articles
What is Group Term Life Insurance?

29 Nov 2021

For individuals with financial responsibilities, term insurance...
Read more
Who Can Be Nominees in a Term plan?

29 Nov 2021

The main reason for buying a term plan is to make sure your...
Read more
Which Term Plan Does Not Require a Medical Exam?

29 Nov 2021

Term insurance is understood as the easiest form of life...
Read more
What Is the Procedure to Choose a Nominee In Term Insurance Policy?

29 Nov 2021

In the event of sudden death of the policyholder, a life...
Read more
What is a Term to Age Policy?

26 Nov 2021

Popular for its low-risk investment, term insurance is steadily...
Read more
LIC Term Insurance 1 Crore
If you have a LIC term insurance 1 Crore handy, you can cherish all your happy moments as you have made a fine...
Read more
Types of Deaths Covered & Not Covered by Term Life Insurance
Types of Deaths Covered and Not Covered by Term Insurance When it comes to securing the future of your loved ones or...
Read more
10 Questions You Should Ask Before Buying Term Insurance
10 Questions You Should Ask Before Buying Term Insurance There are various doubts faced by customers when it comes...
Read more
Term Insurance for NRI in India
Term insurance offers financial protection to the family of the insured in case of demise. Every bread-earner...
Read more
2 Crore Term Insurance Plan
The pandemic has surely generated a global panic and emphasised the importance of financial planning that would...
Read more
Download the Policybazaar app
to manage all your insurance needs.