What is accidental death insurance?

Accidental death is the third leading cause of death in the United States after heart disease and cancer, according to the Centers for Disease Control. (We are not counting COVID-19 in our rankings, as the pandemic seems to be ebbing, thank goodness.) Does this mean you should consider an accidental death insurance policy instead of a more traditional term life insurance policy? Not necessarily.

Some people like the idea of only paying for accidental death coverage — especially young people, who might assume the largest risk to their lives is an unexpected, fatal accident. But the truth is that accidental insurance only provides limited coverage, especially when compared to term life insurance.

The biggest drawback to an accidental death policy is that it leaves you exposed to a much higher chance that your loved ones won’t have a claim. As the CDC reports, only 6% of all deaths in the U.S. are from accidental causes. If you pass away from a cause in the other 94 percent? Your accidental death insurance policy won’t benefit your family.

Here’s what you need to know about accidental death insurance, as well as when you should consider an accidental death policy versus a term life insurance policy.

Accidental death insurance versus life insurance

Accidental death insurance, also known as accidental death and dismemberment or AD&D insurance, is an alternative to term life insurance. As the name suggests, accidental death insurance is designed to protect your beneficiaries if you were to die accidentally — from a car crash, for example, or a workplace injury.

If your policy includes dismemberment coverage, it may also provide some type of living benefit if you are severely injured, paralyzed or loses a limb. Death from illness or natural causes is not covered under accidental death insurance, and many accidental death policies are generally limited to an amount of up to $500,000.

Term life insurance, on the other hand, protects your loved ones if you die within the coverage term — generally 10, 15, 20 or 30 years. Your beneficiaries will receive their death benefit whether your death is the result of an accident, an illness or natural causes, unlike accidental death insurance. Plus, term life insurance is not typically capped at $500,000 in coverage benefits.

Cost of accidental death insurance versus term life insurance

Both accidental death insurance and term life insurance are affordable, especially when compared to permanent life insurance, and many insurance companies and brokers offer both life insurance and accidental death insurance.

However, the two types of policies do not offer the same coverage — so you have to decide how much protection you want for the price you’re paying.

Let’s do some cost-and-benefit comparisons if you’re considering purchasing life insurance:

Term life insurance

Two common types of term life insurance are fully underwritten and simplified issue term life insurance. Both offered by Haven Life and the following will help you compare life insurance options.

Medically underwritten term life insurance

Medically underwritten term life insurance policies are often the most affordable type of coverage. These policies take into consideration your age, lifestyle choices, and personal and family health history to determine eligibility and pricing that’s personalized to you. Medically underwritten coverage also offers the most robust range of coverage options, from tens of thousands of dollars to several million.

Thanks to innovations in underwriting, some medically underwritten policies – like the Haven Term policy – can be purchased without a medical exam for a subset of applicants that qualify to skip it. Once a customer submits an application, they will be instantly notified as to whether they qualify to skip the medical exam or not.

Keep in mind that it’s always very important to be honest in the application process. The issuance of the policy or payment of benefits may depend upon the answers you give in the application and your truthfulness.

Medically underwritten term life insurance is generally pretty affordable. Here are some examples of the cost of coverage for nonsmokers in good and excellent health for a Haven Term policy, issued by MassMutual or its subsidiary C.M. Life.

Quotes for term life insurance

Quotes for term life insurance

AgeGenderHealthFace amountTerm lengthMonthly premium30MaleGood$250,00030$23.92FemaleGood$300,00030$24.28MaleExcellent$500,00030$29.99FemaleExcellent$1,000,00030$43.4135MaleGood$250,00020$16.86FemaleGood$300,00020$17.15MaleExcellent$500,00020$20.72FemaleExcellent$750,00020$23.1340MaleGood$250,00010$15.40FemaleGood$400,00010$18.42MaleExcellent$600,00010$18.98FemaleExcellent$800,00010$20.89

Estimate based on pricing for eligible Haven Term applicants in excellent health. Pricing differences will vary based on ages, health status, coverage amount and term length. These prices do not reflect the rates for applicants in DE, FL, ND, NY and SD.

Simplified issue life insurance

Simplified issue policies typically require applicants to fill out a short questionnaire in the underwriting process, with a few health-related questions. No medical exam is needed to apply and get a coverage decision.

Because full medical underwriting isn’t conducted and thus the insurer knows less about you, these policies are usually more expensive than a medically underwritten policy. Why? Generally, the more an insurer understands about you, the more affordable coverage may be.

Additionally, with simplified issue policies, maximum coverage amounts are usually limited to $500,000 or less. (Though Haven Simple now offers no-medical-exam policies for up to $1 million.) Here are some examples of the cost of coverage for a Haven Simple policy, issued by C.M. Life Insurance Co., a MassMutual subsidiary. Quotes shown are for nonsmokers in excellent health.

Quotes for 100% no medical exam term life insurance

AgeGenderFace amountTerm lengthMonthly premium25Male$200,00020$14.46Female$400,00020$19.7730Male$100,00020$9.70Female$500,00020$22.6035Male$200,00015$14.28Female$300,00015$14.6640Male$200,00010$20.05Female$400,00010$21.64

Estimate based on pricing for eligible Haven Simple applicants in excellent health. Pricing differences will vary based on ages, health status, coverage amount and term length. These prices do not reflect the rates for applicants in DE, FL, ND, NY and SD.

Accidental death insurance

Prices of accidental death insurance are similar to medically underwritten life insurance for the same term length. For example, a 30-year-old woman in excellent health could buy a $500,000, 30-year accidental death policy starting at $26.45 per month, according to insurance broker Fabric, while that same woman can buy a $500,000, 30-year Haven Term policy starting at $25.40 per month.

If she died accidentally while her coverage period for accidental death insurance was active, her beneficiaries would receive a death benefit. However, if she passed away from an illness or health issue, the accidental death benefit would not be paid out to her beneficiaries. With a term life insurance policy, her beneficiaries receive a death benefit whether her death is the result of a covered accident, an illness or natural causes.

What does accidental death insurance cover?

Accidental death insurance generally covers loss of life resulting from accidents involving cars, bikes, work-related machinery, falls, suffocation, choking, drowning, and fires.

Some accidental policies also cover dismemberment, which means you or your beneficiaries can receive a payout for loss of sight, speech, hearing, or a limb. (This is not the same thing as a disability income insurance policy, which is designed to replace a portion of your income if you become unable to work for an extended period of time. Learn more about Haven Disability, and get a quote.)

Accidental death and dismemberment policies generally do not cover fatal accidental injuries caused by surgery, mental or physical illness.

When is accidental death insurance the right choice?

Accidental death insurance is simple to purchase because it doesn’t require any medical underwriting. An accidental death policy may be a better fit than term life insurance if you have been declined life insurance due to health reasons. Cost-conscious consumers also may prefer the generally lower premiums and face amounts of accidental death insurance compared to term life insurance, even though accidental death policies will only pay out after an accident.

The best thing you can do when deciding if AD&D is the right choice is to compare the cost with term life insurance. Make sure you understand how much coverage you’re getting, how much you’re paying for that coverage, when the coverage ends and what exclusions are in the policy.

Doing so will help ensure you’re getting the best value for you — and, more importantly, your family.

How does term life insurance work?

Term life insurance provides life insurance coverage during a specific term length. In most cases, people choose their term length to match the period of time in which their loved ones are financially dependent on their income or labor — until the policyholder reaches retirement age, for example, or until their children grow up. 10-year, 15-year, 20-year and 30-year terms are all popular.

With term life insurance, you are covered regardless of whether your death is caused by accident, illness or other health issue. If there are exclusions that might prevent your beneficiaries from receiving their death benefits, they are generally limited to suicide within the first two years or intentionally not disclosing material information in the application process (like a pre-existing condition).

For many people, medically underwritten term life insurance is a good value. Premiums are usually affordable, and you have coverage during the years your family needs it most — until your mortgage is paid off, your spouse or domestic partner is retired, or your financially dependent children are on their own.

It’s also very easy to apply for term life insurance online. Buying quality term life insurance has become much easier recently thanks to modern technology. You can apply online for a Haven Term policy and receive an instant decision on coverage eligibility.

If a medical exam is needed, you’ll be notified on the spot; with Haven Life, you’ll have 90 days to take it. There’s no reason to fear the medical exam, either — when an exam is needed, most Haven Life customers find it to be a simple process.

If you’re interested in a no-medical exam life insurance policy, Haven Simple might be a good choice for you. Simplified issue life insurance generally costs more than a fully medically underwritten life insurance policy, but it can be a good option for people who don’t want to take a medical exam.

(That said, our legal team would like to remind you that issuing any term life insurance policy or paying its benefits depends upon your insurability, based on your answers to the health questions in the application, and your truthfulness.)

Find the right choice for you and your loved ones

You shouldn’t buy any type of insurance policy until you understand what type of coverage it provides — and in many cases, accidental death insurance won’t provide enough coverage to meet your needs.

Accidental death insurance could be a good option if you are unable to qualify for medical underwriting under a life insurance policy. It may also be a good option if it is the only life insurance coverage you can afford. However, if you are healthy and have an uncomplicated medical history, then you’ll usually get a better value with a medically underwritten term life insurance policy.

Life insurance is valuable to your family and one of the most thoughtful gifts you can provide your loved ones. For many people, term life insurance is a better option than accidental death insurance. An affordable term life insurance policy will help financially protect you and your loved ones, regardless of how you pass away.