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Accident Insurance

Information about Accident Insurance

Accidental death and dismemberment insurance is another name for accident insurance. The policyholder must die as a result of an accident. If this is the case, then the policy will pay a sum to the beneficiary. Unlike certain forms of life insurance, accident insurance does not have an investment option. However, a policyholder can add it to their life insurance policy.

What Qualifies as an Accident?

The policy will define what it considers an accident. In most cases, an accident is any incident that causes sudden and unplanned dismemberment or death. The occurrence must be unexpected and unforeseen, and an event that is unlikely to happen.

Policies have exclusions, and are very strict about what counts as an accident. Events such as war, natural disasters, suicide or deaths or dismemberment caused by illegal drugs or intoxication normally do not count.

What is Dismemberment?

Benefits are paid for blindness or loss of a body part caused by an accident. Some policies even cover paralysis, but others won’t cover dismemberment below the ankle. The payment for partial dismemberment will be less for full dismemberment.

If an accidental death occurs, then a benefit is paid in addition to life insurance the policyholder may have. This is double indemnity. Both sums are paid even if the life insurance and accident insurance are from the same company.

The policyholder must die within a certain timeframe following the accident. And the death must be a direct result of injuries suffered during the accident.