Term Life Insurance Vs Accidental Death Policy
Term life insurance gives you more extensive coverage time, while accidental death benefits are very specific about covering only accidental deaths.
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Term Life Insurance Vs Accidental Death Policy: What Is The Key Difference Between Them?
You really want to make your family feel financially secure, right? Then, you have to know which kind of life insurance would work for you and your family members. There are two of the most commonly used kinds: term life insurance and accidental death policies.
Both will benefit you financially, but both are for two different purposes and have two different features. Here's the simple comparison between term life insurance vs accidental death that will guide you on how the two differ from each other.
What Is the Term Life Insurance?
The term life insurance is kept in existence only for a particular period. Normally, it runs for 10-30 years. In the period, if the person insured dies, then his nominee or family shall receive the death insurance profit. However, if the person insured survives the term, and thereafter, his insurance expires without any payoff.
Important Features:
Tenure: It is the fixed period of coverage for 10, 20, or 30 years.
Coverage Amount: Your choice, depending on how much you want.
Premiums: Comparatively cheaper than whole life insurance, and there are different levels for each term.
Conversion Ease: Most policies allow you to convert to a whole-life policy at some time in the future.
Who Buys?
- People who may need affordable coverage for an extended number of years may need it while raising children or paying off a mortgage.
- This is for people who want the benefits of term life coverage.
What Is the Accidental Death Insurance?
The accidental death insurance policy can be provided to pay only after the death due to accidents. In case the insured person dies because of an accident, then the beneficiary would get the payment. The benefits also come with some additional in the form of dismemberment.
Important Features:
Coverage: The coverage provided by accident insurance is only related to death because of an accident.
Premiums: Accident insurance premiums are relatively lower than term life but mostly provide fewer coverage details.
Payouts: The policies can have double or triple protection for specific types of accidents.
Best Suited For:
- Those people are looking for supplemental coverage for accidental death.
- Those people need low-premiums and a hassle-free policy.
How They Differ?
Here are some common differences between term life insurance vs accidental death policies:
Feature |
Term Life Insurance |
Accidental Death Policy |
Length of Coverage | Fixed term for 10, 20, or 30 years. | The policy is normally fixed to remain in force throughout the lifetime of the premium-paying individual. |
Type of Coverage | Death due to any cause. | Only accidental death
|
Premium | More than accidental death coverage | Generally lower |
Amount Payable | Customized based on needs | Pre-determined amount through the policy |
Other Benefits | Could be convertible to other policies after sometime | Dismemberment benefits may also be found
|
Choose What's Best for You:
Term life insurance:
Term life insurance works for short-term needs, such as while your children still depend on you. Permanent term life insurance policies work if you want to be insured all your life.
With term life insurance, you can choose how much you need based on your own financial situation. Accidental death policies usually have a fixed benefit.
Term life insurance is generally more expensive in premiums than accidental death but insures larger aspects. The premiums should be able to fit well within your budget.
Some term life policies are convertible to a permanent policy later. This feature can be really useful if you have different needs at various times in your life.
Accidental death policies:
If you are involved in a riskful profession (such as construction or firefighting), then you will need an accidental death insurance policy. It provides you with yet another layer of comfort in your mind.
Most accidental death policies come with particular exclusions, such as deaths from certain activities, suicides, or health-related causes. Knowing which exclusions will apply in your case can be helpful in making more informed decisions.
Summarizing:
Be wise when choosing your financial plans, and know whether you want term life or accidental death policies. Term life insurance gives you more extensive coverage time, while accidental death benefits are very specific about covering only accidental deaths.
Analyze your needs, budget, and lifestyle as you decide what will work for you and your family. Choose wisely between the term life insurance vs accidental death policies, because it will pay off in the future.