Individuals have the option to purchase various types of life insurance products to provide benefits to beneficiaries as well as family members. One type of product is a standard life insurance that is provided by a variety of insurance companies. Another type of product that is available is called accidental death insurance. There are pros and cons with each type of policy as well as significant differences in the coverage that is provided.
Standard Life Insurance
Individuals that have a standard life insurance policy have an insurance product that is known as permanent life insurance. This type of insurance typically consists of a whole life or universal life insurance policy. There are also term life insurance policies that are available. Life insurance polices pay benefits when death occurs because of factors such as old age, cancer, most types of illnesses and other factors that are not specifically excluded on a policy.
Accidental Death Insurance
Individuals that have an accidental death insurance policy can be a stand-alone option or added to an existing life insurance policy. Accidental death policies pay a benefit when a death is the result of an accident. Policies can be purchased when taking a trip or when an individual is performing certain types of activities. Individuals can purchase a policy from most insurance companies, offers from credit card companies and credit unions.
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There are some significant differences between life insurance and accidental death insurance. Life insurance policies typically require proof of insurability, such as a medical exam, before an insurer will provide a policy. An accidental death insurance policy typically does not require a medical exam or any other proof of insurabilty to obtain a policy.
An accidental death policy has limitations that are typically not included with a standard life insurance policy. One limitation is that the loss of a limb or eyesight needs to occur within a period such as three months after an accident to receive benefits. Another limitation is that if death occurs, it must have been the result of the injuries that were suffered in an accident. Accidental death policies will also not pay a benefit if an individual dies as the result of a heart attack while driving and crashes his car.
Life insurance and accidental death insurance policies both have exclusions that apply. A life insurance policy typically has an exclusion period for suicide. An accidental death insurance policy has many exclusions that apply on a policy. Exclusions can include a mental or physical illness, death that is the result of suicide, an intentional injury, operating a vehicle while under the influence and death caused by war.