Does it pay to add accidental death benefit to the life policy? Would death in a road rage be considered for accidental death benefits?
Total Comments: 52
Posted: Fri May 15, 2009 10:33 am Post Subject:
Joe and Sam are identical twins. Everything about them is the same. On June 12th, 2009, they are both going to die. Joe is driving down the street and has a heart attack and drives off of a cliff and dies. 5 minutes later, Sam is pushed off the cliff by another driver in an act of road rage.
Does Sam's family need more more than Joe's family? They need the same amount. Therefore, don't buy AD&D. Get a policy that will pay the needed amount regardless of cause of death.
Posted: Fri May 15, 2009 10:48 am Post Subject:
Does it pay to add accidental death benefit to the life policy?
Interesting question.
Of course adding accidental death pays as long as the insured dies within 90 days of the accident. Generally, and no doubt STATE SPECIFIC, if you die after 90 days the policy doesn't pay. Please NO HATE mail until after you read the exclusions in your own policy.
I've personally always felt adding accidental death benefit was rather odd.
If a person NEEDED $500,000 of life insurance you wouldn't buy a $250,000 life policy then add $250,000 accidental death and hope you die by accident so your family would have enough.
The reverse is equally absurd, if you needed $500,000 of coverage and bought a $500,000 policy why would you then ADD accidental death to the policy so the beneficiary is paid $1,000,000 because you died by accident.
Accidental death benefit is very inexpensive to add to life policies but personally as an agent I've always felt this was rather odd.
I'm not saying this is right or wrong, just odd.
Also, I'm just throwing my 2 cents in the ring as this is something I think many agents have struggled with and the above represents how I handle this.
Posted: Sat May 16, 2009 12:46 am Post Subject:
Don't some life policys just automatically come with accidental death or double indem.?
Posted: Sat May 16, 2009 02:16 am Post Subject:
I believe something like less than 1% of all life insurance claims would actually pay anything if the insured had an accidental death benefit. It's really a waste of money and the insured would probably be better off just adding a little more coverage paid in any type of death than hoping for it to be accidental and still qualify as an accident under the insurance company's definition of such.
Posted: Sat May 16, 2009 06:52 am Post Subject:
Hi GarySpicuzza,
I agree with your given comment. It's very informative as well as recommendable. I think health life insurance would be the better choice.
Regards
Posted: Sat May 16, 2009 09:16 am Post Subject:
Adding accidental death benefit to the life policy would make more sense to people who are involved in hazardous jobs.
The advantage is that you would be covered for double the amount of the life plan when just paying half for it. As Gary has mentioned, ADB riders are inexpensive, so it wouldn't alter your rates much.
Anyway, whether or not buying accidental death benefit rider is worthy would depend upon the situation and choice of the insured.
Posted: Sat May 16, 2009 01:40 pm Post Subject:
Adding accidental death benefit to the life policy would make more sense to people who are involved in hazardous jobs.
Nope. It still doesn't make sense. If your family needs extra coverage, they still need it if you drop dead of a heart attack.
Posted: Sat May 16, 2009 04:09 pm Post Subject:
I've personally always felt adding accidental death benefit was rather odd.
Just thought I would share a few interesting statistics:
Mortality
All unintentional injury deaths
Number of deaths: 117,809
Deaths per 100,000 population: 39.7
Cause of death rank: 5
Motor vehicle traffic deaths
Number of deaths: 43,667
Deaths per 100,000 population: 14.7
Unintentional poisoning deaths
Number of deaths: 23,618
Deaths per 100,000 population: 8.0
Unintentional fall deaths
Number of deaths: 19,656
Deaths per 100,000 population: 6.6
Source: Centers for Disease Control & Prevention, Deaths: Final Data for 2005, Tables B, 18
In 2005, there were 2,448,017 reported resident deaths in the United States. The 5th leading cause of death was Accidents (unintentional injuries).
Insurance data and mortality tables tell us that the average life expectancy is about age 78. So, it just makes sense that if a person dies before the age of 78, there is a high probability that the death will be the result of an accident.
As previously mentioned, the accidental death benefit if very inexpensive and I personally believe that it is a wise decision to add it.
I will relate a personal story: My 16-year-old nephew was involved in an auto accident and was transported by life flight helicopter to the hospital, some 40 miles from the scene. The cost of the air ambulance alone was in excess of $25,000. He was maintained on life support for approximately two weeks in a critical care unit. The decision was finally made to disconnect the life support and he died, leaving a hospital bill in excess of $700,000. Then there was the cost of the funeral service and burial.
He was covered under a health insurance policy that had a "lifetime maximum" of $500,000, so the balance of all the expenses that my brother was left to pay was approximately $250,000.
We should buy life insurance in the amount needed to carry out our financial plans at death, but the small amount of premium required to add the accidental death benefit could possibly prevent a financial disaster.
Not really "odd" to me.
Maze
P.S. Would someone delete the "Guest" post, thanks.
Posted: Sat May 16, 2009 09:05 pm Post Subject:
Insurance data and mortality tables tell us that the average life expectancy is about age 78. So, it just makes sense that if a person dies before the age of 78, there is a high probability that the death will be the result of an accident.
Nope. Let's use your numbers.
Life expectancy is the age at which half of the population should still be alive. In other words, if life expectancy is 78, half of the people will die before age 78 and half will die after 78.
I'll give you the benefit of the doubt and assume that 100% of accidental deaths happened to people under the age of 78. This is 117,000 deaths. Because there were 2.4 million deaths, 1.2 million of them would have occured before age 78. This means that 10% of all deaths for people under the age of 78 were due to accident. In other words, there is actually a greater than 90% chance that a death before age 78 is not due to an accident.
I am very sorry to hear about the tragic loss of your nephew.
If he would have had a heart attack instead or if it was an intentional suicidal act, and the hospital bills were the same, the family would have needed just as much coverage and ADD wouldn't have paid a dime.
We don't know how death will occurs. Therefore, get insurance that will pay regardless of how death occurs.
Posted: Sat May 16, 2009 11:02 pm Post Subject:
Don't forget that all of those deaths listed in statistics as "accidental" do not necessarily qualify under the insurance company's definition of it.
Posted: Fri May 15, 2009 10:33 am Post Subject:
Joe and Sam are identical twins. Everything about them is the same. On June 12th, 2009, they are both going to die. Joe is driving down the street and has a heart attack and drives off of a cliff and dies. 5 minutes later, Sam is pushed off the cliff by another driver in an act of road rage.
Does Sam's family need more more than Joe's family? They need the same amount. Therefore, don't buy AD&D. Get a policy that will pay the needed amount regardless of cause of death.
Posted: Fri May 15, 2009 10:48 am Post Subject:
Does it pay to add accidental death benefit to the life policy?
Interesting question.
Of course adding accidental death pays as long as the insured dies within 90 days of the accident. Generally, and no doubt STATE SPECIFIC, if you die after 90 days the policy doesn't pay. Please NO HATE mail until after you read the exclusions in your own policy.
I've personally always felt adding accidental death benefit was rather odd.
If a person NEEDED $500,000 of life insurance you wouldn't buy a $250,000 life policy then add $250,000 accidental death and hope you die by accident so your family would have enough.
The reverse is equally absurd, if you needed $500,000 of coverage and bought a $500,000 policy why would you then ADD accidental death to the policy so the beneficiary is paid $1,000,000 because you died by accident.
Accidental death benefit is very inexpensive to add to life policies but personally as an agent I've always felt this was rather odd.
I'm not saying this is right or wrong, just odd.
Also, I'm just throwing my 2 cents in the ring as this is something I think many agents have struggled with and the above represents how I handle this.
Posted: Sat May 16, 2009 12:46 am Post Subject:
Don't some life policys just automatically come with accidental death or double indem.?
Posted: Sat May 16, 2009 02:16 am Post Subject:
I believe something like less than 1% of all life insurance claims would actually pay anything if the insured had an accidental death benefit. It's really a waste of money and the insured would probably be better off just adding a little more coverage paid in any type of death than hoping for it to be accidental and still qualify as an accident under the insurance company's definition of such.
Posted: Sat May 16, 2009 06:52 am Post Subject:
Hi GarySpicuzza,
I agree with your given comment. It's very informative as well as recommendable. I think health life insurance would be the better choice.
Regards
Posted: Sat May 16, 2009 09:16 am Post Subject:
Adding accidental death benefit to the life policy would make more sense to people who are involved in hazardous jobs.
The advantage is that you would be covered for double the amount of the life plan when just paying half for it. As Gary has mentioned, ADB riders are inexpensive, so it wouldn't alter your rates much.
Anyway, whether or not buying accidental death benefit rider is worthy would depend upon the situation and choice of the insured.
Posted: Sat May 16, 2009 01:40 pm Post Subject:
Adding accidental death benefit to the life policy would make more sense to people who are involved in hazardous jobs.
Nope. It still doesn't make sense. If your family needs extra coverage, they still need it if you drop dead of a heart attack.
Posted: Sat May 16, 2009 04:09 pm Post Subject:
I've personally always felt adding accidental death benefit was rather odd.
Just thought I would share a few interesting statistics:
Mortality
All unintentional injury deaths
Number of deaths: 117,809
Deaths per 100,000 population: 39.7
Cause of death rank: 5
Motor vehicle traffic deaths
Number of deaths: 43,667
Deaths per 100,000 population: 14.7
Unintentional poisoning deaths
Number of deaths: 23,618
Deaths per 100,000 population: 8.0
Unintentional fall deaths
Number of deaths: 19,656
Deaths per 100,000 population: 6.6
Source: Centers for Disease Control & Prevention, Deaths: Final Data for 2005, Tables B, 18
In 2005, there were 2,448,017 reported resident deaths in the United States. The 5th leading cause of death was Accidents (unintentional injuries).
Insurance data and mortality tables tell us that the average life expectancy is about age 78. So, it just makes sense that if a person dies before the age of 78, there is a high probability that the death will be the result of an accident.
As previously mentioned, the accidental death benefit if very inexpensive and I personally believe that it is a wise decision to add it.
I will relate a personal story: My 16-year-old nephew was involved in an auto accident and was transported by life flight helicopter to the hospital, some 40 miles from the scene. The cost of the air ambulance alone was in excess of $25,000. He was maintained on life support for approximately two weeks in a critical care unit. The decision was finally made to disconnect the life support and he died, leaving a hospital bill in excess of $700,000. Then there was the cost of the funeral service and burial.
He was covered under a health insurance policy that had a "lifetime maximum" of $500,000, so the balance of all the expenses that my brother was left to pay was approximately $250,000.
We should buy life insurance in the amount needed to carry out our financial plans at death, but the small amount of premium required to add the accidental death benefit could possibly prevent a financial disaster.
Not really "odd" to me.
Maze
P.S. Would someone delete the "Guest" post, thanks.
Posted: Sat May 16, 2009 09:05 pm Post Subject:
Insurance data and mortality tables tell us that the average life expectancy is about age 78. So, it just makes sense that if a person dies before the age of 78, there is a high probability that the death will be the result of an accident.
Nope. Let's use your numbers.
Life expectancy is the age at which half of the population should still be alive. In other words, if life expectancy is 78, half of the people will die before age 78 and half will die after 78.
I'll give you the benefit of the doubt and assume that 100% of accidental deaths happened to people under the age of 78. This is 117,000 deaths. Because there were 2.4 million deaths, 1.2 million of them would have occured before age 78. This means that 10% of all deaths for people under the age of 78 were due to accident. In other words, there is actually a greater than 90% chance that a death before age 78 is not due to an accident.
I am very sorry to hear about the tragic loss of your nephew.
If he would have had a heart attack instead or if it was an intentional suicidal act, and the hospital bills were the same, the family would have needed just as much coverage and ADD wouldn't have paid a dime.
We don't know how death will occurs. Therefore, get insurance that will pay regardless of how death occurs.
Posted: Sat May 16, 2009 11:02 pm Post Subject:
Don't forget that all of those deaths listed in statistics as "accidental" do not necessarily qualify under the insurance company's definition of it.
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