Life and Accident Insurance
An increasing number of people in the UK are involved in accidents every year. Serious injuries can be costly, especially if you have to take time out of work due to a length recovery – and that’s not to mention the medical expenses.
And, in the event of you passing away as a result of an accident, your family may suffer financially, especially if you’re the breadwinner.
Many people take out life insurance policies to ensure that loved ones are taken care of if the unspeakable happens.
But is life insurance sufficient in the event of an accident? And are you covered if you don’t pass away?
There are ways to allow for funds to be paid out in the event of a serious but non-fatal accident. This is where accidental life cover (also known as “personal accident insurance) and “accidental death and dismemberment” (AD&D) insurance comes in:
- What is accidental life insurance?
- What does personal accident insurance cover?
- Does life insurance cover accidents?
- What is “accidental death” life insurance?
- What does AD&D life insurance cover?
- Life insurance versus “accidental death” insurance
- Speak to an expert to discuss accidental life insurance further
What is accidental life insurance?
Personal accident insurance or “accidental life insurance” will pay out compensation to you as the holder, or your beneficiaries, if you suffer an injury (which may or may not be serious long-term) or death as a result of an accident.
Typically, this benefit will be used to pay for prescriptions or medical care that may not be covered by your health insurance (if applicable) or the NHS. It can also help your family out with bills and other expenses to protect them against loss of income.
What does personal accident insurance cover?
Personal accident insurance pays out for a wide variety of injuries. Exactly what you’re covered for will depend on your individual policy, but some common examples include:
- An accident at work
- Injury caused by violence
- Injury caused by a road traffic accident
- Fractures and dislocations
- Brain injury
- Gunshot wound
- Short-term or permanent disability
- Dismemberment or loss of use of limbs
Does life insurance cover accidents?
Yes, in many cases accidental life insurance is already included in life insurance cover, and is sometimes offered as an add-on to car insurance policies. Any cover provided by a car insurer is likely to only be a nominal figure though.
So if you already pay for life and / or car insurance, check the terms of your plan(s) to see what is and isn’t covered. Alternatively, get in touch with your insurer(s) who can go through the fine print with you.
What is “accidental death” life insurance?
“Accidental death” insurance or “AD&D”insurance can be defined as a “a form of limited life insurance, designed to cover the unintentional death or permanent impairment of the policy holder as a result of an accident.”
It differs from personal accident insurance because you or your beneficiaries will only receive a payout if the accident results in a covered injury that causes a permanent damage.
This is a limited form of life insurance which is generally less expensive due to the fact that they only cover accidents. Again, in some cases, this comes as an added benefit to an existing life insurance policy.
What does AD&D life insurance cover?
Before opting to take out an AD&D insurance policy, or making it an add-on to an existing life insurance policy, it’s important to know what is considered an “accident”, so you know in which circumstances you’re covered.
AD&D policies cover not only accidental death (in which case your beneficiaries should receive a full payout, as detailed in your plan), but also loss of limb(s) or any body functions (speech, eyesight and hearing).
Dismemberment coverage usually works on a “per-member” basis. So, if you lose one “member” (one limb, or sight in one eye) your insurer may only pay out 50%. Some insurers have additional payout restrictions, so check the terms carefully.
There may also be additional restrictions, which will vary by insurer. Typically, your injuries or death must occur within a certain time period after the incident occurs to receive the payout. The death or injuries must also be proven to be as a direct result of the accident.
If you have a particularly high-risk job, or regularly partake in dangerous activities this could also be omitted from coverage, although some specialist providers offer plans which will cover such instances.
Want to find out more? Get in touch.
Life insurance vs accidental death and dismemberment insurance
Accidental death and dismemberment insurance (AD&D) is not the same as standard life insurance.
An AD&D policy is generally offered in addition to life insurance. So, while you can buy it as a standalone product, it’s more commonly purchased as an add-on.
Life insurance is basic coverage that pays out if you die within a stated time period, regardless of the reason; this includes whether you pass away due to an illness, accident or other cause – although suicide and death from drug and alcohol abuse is exempt from most plans.
AD&D policies only pay out if you are killed or suffer a permanent impairment as a result of an accident. Standard life insurance does not cover non-fatal accidents or dismemberment’s.
AD&D cover shouldn’t be seen as an alternative to standard life insurance, although if funds are limited it can provide valuable supplemental coverage, usually at a more affordable price to life insurance.
Ask an expert: Should I take out personal accident insurance or AD&D cover?
If you’re still unsure of the differences between accidental life and AD&D insurance, or wondering whether it’s worth taking out cover either as standalone products, or in addition to a current life insurance policy, feel free to get in touch.
The team we work with are experts in the field, and are just a phone call away if you wish to discuss your individual circumstances in more detail. They can even run through the terms of any current health insurance policies with you if desired.
You can call us on 0808 189 2301 or submit an online enquiry here or fill out the form below, and one of the specialists we work with will be in touch to assist.