08 Feb, 2022 | Term Life Insurance

Does Term Insurance Cover Accidental Death?

Aakansha Jain
By Aakansha Jain
Budding Content Developer at Beshak
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The insurance arena is filled with myths and misconceptions that can deter a person from investing in a plan. Even when it comes to term insurance, which is literally the most simple life insurance type! 

One such myth that has been making rounds is that term insurance doesn't cover multiple types of deaths. But, we're here to bust this! We deep-dived into loads of term insurance plans in the Indian insurance market and discovered that only death by suicide (during the first policy year) is not covered. 

So, is accidental death covered in term insurance? Yes, it is! Term insurance covers death due to accidents too whether it takes place at home or when you’re in the air traveling in a plane or participating in an adventurous activity. 

Why Do We Need To Cover Accidental Death?

Accidents don’t tell and happen. According to a report by the World Bank, India accounts for 11% of the global deaths in road accidents, the highest in the world. These are only road accidents statistics - accidents at home and other places are a lot more likely to happen as well even though they don't get reported. 

The consequences of accidents are both - physical and financial. While accidents can cause injuries that lead to disability, they can also result in death. And it can have a major financial impact on your family, leaving them in a financially distressed situation. Therefore, you must be prepared for them and safeguard your family's financial future.

What Kind Of Additional Papers Are Required In Case Of Accidental Death?

When your nominee files for the claim, the insurer will also ask for certain additional documents in case your death happens due to an accident. Therefore, along with the mandatory documents, your nominee will also have to submit other documents such as - 

  1. First Information Report / Punchnama / Inquest Report 
  2. Final Police Investigation Report / Charge Sheet
  3. Post Mortem Report / Autopsy and Chemical Viscera Report

Accidental Death Benefit Rider in Term Insurance

You might’ve heard about riders while buying a term insurance policy. Riders are easy-to-buy add-ons that provide you with extra benefits at a little extra cost. If you purchase the accidental death benefit rider along with your term insurance plan, your family will receive an additional sum of money in case your death happens due to an accident. 

But since a regular term insurance policy covers accidental death, it makes no sense to buy two different covers, does it? We did a comparison and found out that the cost of this rider is very similar to a regular term insurance cover. Therefore, you should first try to buy enough term insurance cover.

Who Should Buy The Accidental Death Benefit Rider?

There’s usually an income-related limit on the amount of term insurance cover you can buy. So if you’re not able to buy the desirable term insurance cover, you can consider buying the accidental death benefit rider along with your term insurance cover. 

Let’s say you calculate and find out that you need to buy INR 2 Crore cover for your family. But, due to eligibility constraints, you are able to buy a term cover of only INR 1.5 Crore. In such a case, you can buy the accidental death benefit rider for INR 50 Lakhs, so that in case your death happens due to an accident, your family will at least be sufficiently covered. 

Summing up, except death due to suicide in the first year of taking the policy, term insurance covers every type of death - even accidents. In case you’re unable to buy a sufficient term insurance cover due to eligibility reasons, you can take the accidental death benefit rider which will provide your family with an additional sum of money if your death happens due to an accident. 

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Key takeaways
  1. Except for death due to suicide in the first year of buying the policy, all types of death is covered by term life insurance including accidental death.
  2. If you opt for the accidental death benefit rider while buying term insurance, it will provide an additional sum of money to your family if your death happens due to an accident.
  3. The cost of the accidental death benefit rider is very similar to a regular term insurance policy. So, if you’re eligible, you should buy enough term insurance cover first. If you’re not, then you can buy the rider.
  4. In case your death happens due to an accident, your nominee will have to submit additional documents such as the FIR, Final Police Investigation Report, and the Post Mortem Report while filing for the claim
Aakansha Jain
Written by,
Aakansha Jain, Budding Content Developer at Beshak

Aakansha is a Content Ideator and Writer at Beshak. With her easy-to-understand content, she makes insurance simple for everyone. She comes with a strong background in finance and commerce and wants to help families make positive insurance decisions that are good for a lifetime.

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