Does Term Life Insurance Cover Accidental Death?

Absolutely no one wants to think about death. You don’t want to think about death or a loved one and you certainly don’t want to think about dying yourself. Unfortunately, death is a natural part of life. It will happen at some point or another. The only thing that you can do is to prepare for it or help those that you love to prepare for it. If you are going to go away forever, you should at least make sure that you are leaving those behind well cared for. And, that is exactly where life insurance comes in handy. Life insurance is no doubt complicated because it comes available in so many policies.

Two of today’s most popular policies are the accidental death policy and the term life insurance policy. Many people even purchase these policies together just to provide themselves with even more protection. Whatever the situation is, life insurance is all about meeting your specific needs. Do you even know what your needs are? Don’t worry because you are going to learn all about both term life and accidental death insurance.


Understanding Term Life Insurance

Most people can probably guess as to what accidental death insurance is. However, term life insurance is a term that is a bit vaguer. All that aside, term life insurance is basically just a form of life insurance that covers you for a set term. Not only does it cover you for a set term, but it covers you for a set amount of money. For instance, in Canada, you might be able to take out $250,000 for the next 20 years. This means that if you passed in the next 20 years, you would be leaving $250,000 behind. It is also important to understand that this money is tax-free. That means that no taxes whatsoever is going to be deducted from this sum.

Sounds pretty good, right? Well, here is where things can get a bit confusing. During that 20-year period, you will be required to pay premiums in order to keep the policy active. There are some exclusions with this type of insurance, but most of the time, these policies cover nearly any type of death during the term. So, it doesn’t matter if the death is accidental or intentional, your beneficiaries will be awarded $250,000 tax-free upon your death.


Why Is Term Life A Top Pick For Some?

There is simply no getting around the fact that term life insurance sounds great. Who wouldn’t want to know that their family is going to be left with $250,000 when they die? This is an immense amount of money. It could be enough to get them out of debt or at least pay down some debt. However, this does not mean that term life is perfect for everyone and it isn’t. In fact, term life insurance does come with some major drawbacks. The first probably being that your payments are going to rise over time. As you grow older, you simply become more of a risk to the insurance agency.

This is why most people will purchase these policies when they are young. The younger you buy, the cheaper you are going to get off. Plus, life is unpredictable and it is always good to be covered in every situation possible. Another huge major disadvantage of term life is that it simply isn’t structured to provide cash value. This means that if you find yourself in a hard spot, you will not be able to borrow against the policy.


What Is Accidental Death Insurance?

Accidental death is pretty much just what the name suggests, although the name isn’t as suggestive as you might think. What does this mean? It means accidental death cover accidental deaths, but excludes natural causes. If you die as a result of cancer, heart disease, or suicide the insurance company isn’t going to pay anything out. One probably doesn’t think that they need accidental death insurance, but you might be surprised to learn that accidental deaths are up there amongst the lead causes of death in Canada. This might not seem like a lot, but it is when you factor it up.

If you are not able to get term life insurance for some reason then accidental death is an excellent and affordable alternative. Plus, there are some individuals that like to combine this policy with their group life policies through work. This is simply just another effective means to ensure that your family is cared for in the event of your death. It is also good to know that there are additional benefits that come along with this insurance as well.

One such benefit is that if you die while riding public transport your beneficiaries will be awarded 100 percent of the benefit.


Who Is Accidental Death Insurance For?

While accidental death is great, it certainly isn’t right for everyone. Investing in accidental death insurance really is like playing the lottery. The chances of you experiencing an accidental death are higher than you would imagine, but they are still somewhat low. Most people just can economically justify paying this additional expense each month or year. Some with the extra money to spare don’t have a problem investing the extra money in these types of policies. All that aside, one of the biggest advantages of accidental death is that there are no medical exams required.

No medical exams mean that you are going to get insured quicker and faster. In fact, with most Canadian providers, your coverage can begin the same day as you sign up. While there are some that can’t economically justify buying accidental life insurance, it is fairly affordable due to the fact that the market is oversaturated with providers. Accidental life insurance is a win/win for insurance providers and they will be more than willing to take your business.


Why Isn’t A Medical Exam Required For Accidental Insurance?

Accidental death insurance only covers accidental deaths, which means that it doesn’t cover you if you die of natural causes. Since insurance companies don’t have to pay out if you die of natural causes your health condition isn’t going to matter. You could have stage 3 cancer and get accidental life insurance. In fact, most Canadian providers won’t even ask you any medical questions when you are applying for coverage. That being said, there are some exceptions and limitations. One is that you can only buy coverage up until the age of seventy, but you can keep it until you are eighty.

This means that you can buy a 10-year policy when you are seventy and keep it until you are eighty. Once you turn eighty the policy will be gone and you won’t be able to sign back up.


Understanding Traditional Term Life Insurance

Now, most people think that just because they have term life insurance they are covered in the event of accidental death. Unfortunately, this is not the case at all, and you do not want to wait too late to figure this out. If this happens, you might end up leaving your family with nothing. The reason most people make this assumption is that there is such a policy known as traditional life insurance. This is basically like a combination of accidental and life insurance. You get the best of both worlds. Usually just about every provider that offers either term life or accidental insurance will also offer traditional term life insurance.


When Is Term Life Insurance Necessary?

Most people get life insurance through their employers and they think that is all they need. Well, you might be right, but there is also a chance that you might not be right. When’s the last time you reviewed your finances and your coverage? Have you compared the two lately? As the years pass, expenses rise. Maybe you took the policy out 10 years ago. Maybe you are just considering term life for the first time. Whatever the situation is, some type of life insurance is usually initiated when a person needs or wants to provide an immediate estate upon his or her death.

There are usually a number of reasons that this need can occur. For instance, maybe you need to provide financial support to a family member until they reach the point where they can care for themselves, perhaps you have will be providing a large amount of cash upon your death to cover college expenses or other capital needs, or maybe you just want to ensure that your funeral expenses are covered. There really are a number of valid reasons that one can use to justify taking out a term life policy.


When Is Accidental Life Insurance Needed?

This is a hard one to answer because, once again, accidental death is just like playing the lottery. It could and it couldn’t happen, so how do you know if you need to prepare or not? It is best to just go ahead and prepare, right? This is true, but it is possible that you are already prepared enough. If you have life insurance through your employer then you might not even need accidental life insurance. However, if you are constantly pushing the boundaries then you might want to go ahead and make the investment.


How To Get Accidental And Term Life Insurance?

Luckily, acquire either of these policies isn’t going to be too hard. This is especially true for Canadians. There are currently numerous insurers ready to handle your case. However, not all of these insurers are created equally. We here at Sim Gakhar want you to know that we have your best interests in mind when it comes to life insurance. We specialize in life insurance and work with numerous clients every day. We help them build policies that will ensure they are covered to the fullest in the event of death, and we can do the same thing for you.

All you have to do is visit our website or give us a call at our toll-free number. You can get a quote from our website in just a matter of minutes or you can speak with a live operator to get a quote. Either way, we are here to serve you and all your life insurance needs.


Last And Final Thoughts

One should never really be so quick to discount accidental life insurance. You can see from the information above that there are a number of possible scenarios where this type of coverage can come in handy. Not only this but for some individuals, it is their only option. Not everyone can qualify for term life insurance due to health conditions. And, those that cannot apply are left with no choice but accidental. Even if you already have existing coverage, you still can never go wrong with adding another security blanket. You are talking about your loved one’s well being after all.


Get in touch

I am always a call away. If you are looking into life insurance coverage for the very first time or would like to discuss your existing policies, I would be glad to be your Markham life insurance advisor.

My contact information can be found here.

Sim Gakhar