Accidental death benefit (ADB), formerly known as Double Indemnity, has the potential to double (or more) a life insurance payout if the policyholder dies in an accident. With life insurance being a necessary but also expensive part of life, you may be wondering if adding anything to your policy is worth it. The short answer: when ADB does payout, it is going to afford your beneficiaries a sizeable ROI, but it doesn’t payout often so there are other factors to consider.
What is Accidental Death Benefit Exactly?
The exact conditions for payout will depend on your policy, but the primary goal of an ADB is to provide beneficiaries with a greater payout when a death is deemed accidental. This amount is in addition to the payout established for a death by natural causes but will typically exclude death caused by engaging in hazardous hobbies and illegal activities.
Who Should Consider Adding an ADB Rider?
Those who work in hazardous conditions and/or who drive more than an average amount – as a driver or passenger/commuter – are the most likely to benefit from accidental death payouts. There is also often an age stipulation that ends the time when the ADB can be paid out. Typically, those who are 70 and older will not be eligible for an accidental death payout. When deciding if you or a loved one should purchase an ADB rider, ask about age limitations to ensure you are not purchasing an option that may not be in effect for long.
There may be other situations where you are more likely to benefit from ADB, but these are the most common scenarios and a qualified insurance agent can guide you to making the choice based on your individual needs and budget.
Other Considerations: ADB riders can be hugely beneficial for the right groups of people, however; they are cheaper because they are unlikely to payout. Accidental death simply isn’t as common as other natural causes. If you know that your dependents will require a larger payout from your policy, it is far better to get the right amount of coverage for any cause of death than spending money on ADB. This will eliminate the possibility that your beneficiaries are left with less than they need and will prevent you from wasting money on an unnecessary rider.
Multiple factors can determine your eligibility for an ADB. If you’re considering life insurance or additional riders and benefits, you need a qualified agent capable of guiding you to the right options for your needs. At Arbor Creek Financial, we take your total financial well-being into consideration when recommending insurance products for you and your loved ones. To speak to a knowledgeable financial expert, contact Arbor Creek today.
Types of ADB
ADB is offered in 4 primary categories including as part of a Group Policy, as a voluntary benefit you can choose to add, as a Travel Accident option provided by an employer, and also as a benefit that covers Dependents. Each will have their own stipulations, benefits and drawbacks to consider.
Choosing Your Accidental Death Benefits
Multiple factors can determine your eligibility for an ADB. If you’re considering life insurance or additional riders and benefits, you need a qualified agent capable of guiding you to the right options for your needs. At Arbor Creek Financial, we take your total financial well-being into consideration when recommending insurance products for you and your loved ones. To speak to a knowledgeable financial expert, contact Arbor Creek today.