What is Accidental Death Benefit?
An Accidental Death Benefit (ADB) is a rider or clause in a life insurance policy that provides an extra payout to the beneficiaries if the insured dies due to an accident. This benefit is typically in addition to the base death benefit of the policy, offering financial support in case of unforeseen fatal accidents.
Many life insurance policies offer the Accidental Death Benefit Rider as an optional add-on. This rider is particularly useful for individuals with high-risk occupations, frequent travelers, or those concerned about unexpected fatalities due to accidents.
To qualify for the benefit, the death must typically result from an accident, such as a car crash, fall, or drowning, and occur within a specified time frame after the incident (often within 90 to 180 days). Deaths caused by illnesses, self-inflicted injuries, or hazardous activities (like skydiving or racing) may not be covered.
For example, if a person has a $500,000 life insurance policy with an ADB rider of an additional $500,000, their beneficiaries would receive a total of $1,000,000 if the insured dies in a covered accident.
This benefit provides an extra financial cushion to families, helping them cover sudden expenses like medical bills, funeral costs, and lost income due to the unexpected loss of a loved one.