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When it comes to decisions about your life insurance policy, you may have looked at personalizing your plan by purchasing a rider, which is supplemental protection that enhances your base policy. One option worth considering is an accidental death rider.
Accidental death insurance coverage can be a good idea for some policyholders, but it's not a must for everyone. For those who work in high-risk industries, such as construction or truck driving, an accidental death rider might be an essential part of their life insurance planning. For other people, it may not merit the cost. Because the decision is highly personal, it's important to take a holistic look at your lifestyle, your budget and your family's needs as you weigh the pros and cons.
Here's some of what you need to know about accidental death life insurance riders, including how they work, which situations they do (and don't) cover and a few examples of when you may want to add one to your own life insurance coverage.
Key Takeaways
- Accidental death insurance coverage can be a good idea for some policyholders, but it's not a must for everyone.
- An accidental death rider increases the death benefit if you, the policyholder, die from an accident. This is an additional benefit on top of what's included in your existing life insurance policy.
- Deciding whether to add an accidental death rider to your life insurance policy comes down to your personal preferences and circumstances. As you make your decision, consider three key factors: your profession, your family's needs and your budget.
- If you're thinking about adding an accidental death rider to your life insurance policy, you might also be interested in a life insurance rider that offers living benefits.
What Is an Insurance Rider?
A rider in general is any add-on to insurance that customizes and enhances it. Riders are amendments to a standard insurance policy. They offer many options to better tailor your coverage. An accidental death rider increases the death benefit if you, the policyholder, die from an accident. This is an additional benefit on top of what's included in your existing life insurance policy. Depending on the amount of your rider, it could potentially double the total death benefit paid to your beneficiaries if you die due to an accident.
How Does an Accidental Death Rider Work?
Most accidental death riders offer double indemnity, which means they double the amount of the policy's death benefit if the insured dies due to an accident. So, if your life insurance policy has a death benefit of $100,000, adding an accidental death rider to your policy could increase the death benefit to $200,000 if you pass away from an accident covered by the rider.
Accidental death riders are easy to add to existing life insurance plans without medical exam.
It's also important to note that accidental death riders are different from accidental death insurance. A rider is an addendum to your existing life insurance plan while accidental death insurance coverage is a standalone policy that covers death only in certain specified instances. If you don't currently own a life insurance policy and need life insurance coverage just for in case of an accident, you may want to consider accidental death insurance rather than a rider.
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What Does an Accidental Death Rider Cover?
An accidental death rider pays a death benefit when the policyholder dies in certain types of accidents. These may include car crashes, drowning or on-the-job accidents, among other scenarios. The specifics vary from policy to policy across insurance providers, so be sure to thoroughly review what the rider covers (and excludes) before you add one to your life insurance policy.
Accidental death riders generally have some exclusions — certain causes of death aren't covered by the rider, such as dangerous hobbies like skydiving, racing or motorcycle riding. Most riders also don't cover death by suicide or substance overdose, and there may be exclusions for death from illness and death in certain circumstances like plane crashes or acts of war. These types of riders also generally exclude death as a result of illegal activities, such as driving under the influence of drugs or alcohol.
Timing matters when it comes to accidental death riders. Most policies specify a time period after an accident during which a death can qualify for the rider benefit. If the policyholder passes away six months after an accident, for example, the death may not qualify for the accidental death rider benefit. In most cases, an accident must cause death within a relatively short window in order to qualify for the death benefit.
Accidental death riders also typically have an age limit. For example, you may not be able to add one to your policy after age 65.
Reasons for Purchasing an Accidental Death Rider
If you work in a job that comes with significant physical risks, such as construction, roofing, fishing, mining or one involving heavy machinery, an accidental death rider may be a wise option. The riskier your job, the greater the chance you could be involved in an accident.
No one likes to consider the worst-case scenario, but if a fatal accident occurs and you have an accidental death rider, your family could be better provided for with an additional payout on top of the standard death benefit from your life insurance policy. You don't have to work in a dangerous job to purchase an accidental death rider. Many people choose to add this type of rider to their policy in order to be covered just in case because they know that accidents can occur in any setting, either in or out of the workplace.
Depending on your financial situation, adding a rider can also be a good way to protect your family and helping avoid leaving them with expensive medical bills or other debts. If you don't have a large amount of cash savings, adding a rider to your life insurance policy can be an effective way to plan for the future and help better ensure your family's financial needs will be covered if you die in an accident.
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Are Accidental Death Riders Worth It?
Deciding whether to add an accidental death rider to your life insurance policy comes down to your personal preferences and circumstances. As you make your decision, consider three key factors: your profession, your family's needs and your budget.
Work Considerations
If you work in a job with a relatively high rate of accidents and fatalities, an accidental death rider could be a worthwhile investment. If you aren't sure how risky your job is compared to others, do some research — you can find data from the U.S. Bureau of Labor Statistics (BLS) that documents the prevalence of workplace injuries and fatalities across industries, age groups, races and ethnicities, among other variables.1 This can help you evaluate your level of risk. BLS data also documents the frequency of certain types of fatalities, including deaths occurring in transit, as a result of falling or from exposure to harmful substances or environments.
These are the professions with the highest fatality rates, according to the BLS:2
- Fishing and hunting workers
- Logging workers
- Roofers
- Construction workers
- Aircraft pilots and flight engineers
- Trash and recycling collectors
- Iron and steel workers
- Drivers and truck drivers
Even if you work in a relatively low-risk job, an accidental death rider could be worth it if you're frequently behind the wheel on your commute. Car crashes are generally covered by accidental death riders. Nearly 40,000 people died in motor vehicle crashes in 2020.3
Family Considerations
You may also want to factor in the size of your family and how many people depend on your income when thinking about adding a rider to your policy.
If you're supporting a large family, an accidental death rider increases the life insurance benefit they receive if you die in an accident. If you have young children, the additional insurance benefit could be key in helping support their needs and education in the future. If you have a partner, consider whether they work and, if so, whether their salary could support your entire family if you were to die in an accident.
Budget Considerations
One of the main benefits of adding a rider to your life insurance coverage is that your loved ones will receive a higher death benefit if you pass away. But that higher benefit also comes with a higher premium for your life insurance coverage: You'll pay more for the extra coverage.
When deciding if a rider is worth it, don't forget to consider how a higher premium will fit into your budget. If you'll have to stretch to make ends meet with a higher life insurance premium, it might not be the right time to add this rider to your policy. If you have wiggle room in your budget, it could be worth the feeling of protection. A financial professional can help you weigh the cost against the benefits.
Other Factors When Thinking About Riders
If you're thinking about adding an accidental death rider to your life insurance policy, you might also be interested in a life insurance rider that offers living benefits. These are riders that make an early payment on your life insurance benefit in the event that you become injured or sick. This can be a way to help care for yourself and your loved ones if you're ever injured and out of work. Living benefits may be especially appealing to people at high risk of being injured at work.
Many policyholders find that an accidental death rider offers some high-level reassurance. No one likes to imagine dying in an accident, but a rider that you add to your life insurance policy is one way to try to make sure your loved ones will be cared for.
As you consider purchasing an accidental death rider, reflect on your personal circumstances, your family's needs and your budget. As always, work with a qualified financial professional to make the decision that best addresses your situation.
Sources
- Injuries, illnesses, and fatalities: Census of fatal occupational injuries. U.S. Bureau of Labor Statistics. https://www.bls.gov/iif/oshcfoi1.htm. Last modified December 16, 2021. Accessed July 12, 2022.
- National census of fatal occupational injuries in 2020. U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/pdf/cfoi.pdf. Published December 16, 2021. Accessed July 12, 2022.
- Fatality facts 2020 yearly snapshot. Insurance Institute for Highway Safety. https://www.iihs.org/topics/fatality-statistics/detail/yearly-snapshot. Published May 2022. Accessed July 12, 2022.
