Save Money On Life Insurance Coverage With Accidental Death And Dismemberment Insurance

Some of the most common advice given for helping people find the lowest life insurance

rates includes choosing term life insurance, comparing competitors' rates through an independent agency, and maybe even working with an actual agent. This is sound advice, but a shopper may save even more money by choosing accidental death and dismemberment insurance (and yes, you can still enlist the aid of an agent).

Accidental death and dismemberment insurance may not suit every purpose, but it is a cost-effective choice for the most popular purpose of life insurance: to provide financial indemnity in case of an unexpected and untimely death. This is the age range for which Americans typically have reason to make life insurance plans, and coincidentally, perhaps the most probable cause of death at this time in life is an accident.

What's covered? What's excluded?

Coverage and exclusions vary from one insurer to the next, but accidental deaths typically include what one normally thinks of as an accident (e.g. such as a harpoon through the eye) and also unforeseen deaths which don't usually fall under the term "accident.". What's not covered is old age, death by illness, and suicide.

From age 20 to age 50, then, accidental death and dismemberment insurance may be just the right life insurance product. If you find after the passage of time that your risks have changed, you can drop your existing coverage and buy a different kind of insurance.

Can you afford the risk of excluding non-accidental deaths?

When you buy term life insurance or any insurance product, you can't escape the fact that you're going to be left with at least some risk. The insurance game is always about finding a comfortable balance between expense and risk. If your likelihood of dying from old age, illness, and suicide is extremely low (as it is for most people aged 20 to 50) then chances are that accidental death and dismemberment insurance can completely replace your ordinary term insurance with scarcely an elevation to the risk you still carry.

What's this about dismemberment?

Accidental death and dismemberment insurance pays out an indemnification, not just if the insured dies, but also if the insured loses the use of a limb, digit, eye, or ear.

As before, just what constitutes a "dismemberment" may vary from company to company, and so may the size of the death benefit. Logically, an accidental death and dismemberment policy will not pay a benefit of its full face amount for an individual who loses a thumb but is otherwise alive and unharmed. (The policy may pay out a full benefit for some non-lethal accidents, as with the loss of two limbs, however.) Your policy will stipulate just how much it will pay out for each "dismembering" accident that is covered.

Copyright (c) 2010 Mark Manderson

by: Mark Manderson

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