Accidental death benefit riders can be a necessary element in life insurance coverage. This rider adds an extra provision to your coverage so that your loved ones will receive a higher payout should you die in an unexpected accident.
These types of riders can bring a feeling of security to employees in more accident-prone positions, such as in high-risk jobs or professions that require a high amount of travel. But accidental death benefit riders will often come at an added cost to a life insurance policy, so it’s important to know the cost breakdown before you purchase this additional coverage feature.
How accidental death benefit riders work
Accidental death benefit riders are an additional feature in a life insurance policy that will provide your loved ones with an additional payout if you happen to pass away in an unexpected accident.
Funeral expenses, debts, and burial costs can be significantly more expensive if the deceased doesn’t have their affairs in order. The purpose for these riders is to help cover any of these unexpected costs that may arise from an accidental death. Although an accidental death rider will usually cover the policyholder only, many insurance companies offer dependent plans that allow you to extend coverage to your spouse or children.
To purchase an accidental death benefit rider, simply request to your insurance agent that a rider be added to your policy. Since most accidental death riders are guaranteed issue, you’ll need no prior medical examination to obtain one.
What are the costs involved in an accidental death rider?
Typically, the main cost involved in an accidental death rider will be accommodated by an extra increase in your premium payments. This increase on your payments isn’t without an upside, though.
If you purchase an accidental death benefit rider, your beneficiaries will often receive up to double the payout of the original life insurance benefit to help with the costs involved with your unexpected passing. This can come in handy with expenses like funeral and burial costs, as well as outstanding debts.
Cost differences between an accidental death rider and an accidental death policy
If you’re considering your options, you may be wondering whether you should get an accidental death rider or an accidental death benefit policy. A standalone policy can also provide coverage for your family in the event of a covered accident. This type of policy is typically guaranteed to be issued, so you won’t need to worry about a medical exam. But there are different costs associated with accidental death riders and accidental death policies.
Accidental death riders will usually cost less than purchasing a standalone accidental death policy, though there are advantages to purchasing both, depending on your situation. Consider your options and consult with a financial advisor if you’re unsure which type of coverage is best for you.
The bottom line
Accidental death riders don’t come standard with every life insurance policy. If you’re in need of one, it’s important to understand how to add this feature to your coverage and what situations it covers.
Learn more about accidental death benefit riders, along with other life insurance riders, to see if they’ll work with your life insurance strategy. Once you’ve brushed up on the ins and outs of life insurance riders, you can pick and choose what added benefits might work best for you.
