Accidental Benefits in Term Insurance: A Complete Guide

11-June-2021 |

Term insurance is a kind of life insurance policy that financially looks after your loved ones in the unfortunate event of your untimely demise. The benefits of term life insurance plans are several, including simplicity, affordable premiums for high coverage, safeguarding your family from the burden of debt, etc. These term plan benefits can be amplified further with the additional protection of an accidental death insurance rider#.


Term insurance is a pure protection plan


The key thing to remember about a term insurance plan is that it does not have a maturity benefit. This means there is a payout to the nominees only in the case of the insured individual’s death. However, it is still prudent to have a term insurance policy due to the host of benefits it provides, whether you are the head of a family or a young individual planning one.


The best part of a term insurance policy is that even though it is a pure protection plan, it can be made more solid by adding the right kind of insurance riders#. A term insurance rider# means an added benefit to your basic term insurance plan. It is a kind of an upgrade, and because it provides you with an additional benefit, you need to pay a higher policy premium. But some riders#, such as the accidental death insurance policy rider#, are worth every additional rupee.


Accidental death benefit in term insurance


The uncertain nature of life makes humans vulnerable to death due to several causes. Accidents are one of such common causes of death, and a term plan with accidental benefit is a way to take care of that possibility financially.


If the insured individual passes away in an accident, the term insurance policy payout will be increased if it has the accidental death benefit. For instance, if the base coverage of the term insurance is ₹ 50 lakhs and the accidental death insurance rider# coverage is ₹ 15 lakhs, the nominee of the insured will receive ₹ 65 lakhs in all in the event of death due to an accident.


It is essential to note that even if the insured’s death is due to a cause other than an accident, the base sum assured will be paid. That is ₹ 50 lakhs in the above example. So a term plan with accidental benefit does not take away anything from the term insurance policy. It just makes it more foolproof.


Are accidents covered in term insurance?


Yes, accidents are covered in a term insurance policy. A typical term insurance policy will pay the sum assured, irrespective of the cause of death, whether it is health-related or due to an accident.


However, the advantage of opting for the accidental death benefit rider# is that it increases the amount of money your family receives if the cause of death is an accident. This benefit can be taken with only a slight increase in the premium. Hence, it turns out to be a relatively affordable option compared to increasing the basic term insurance coverage without this rider#.


There is also another type of accidental benefit with a term plan - it often comes with a second type of rider# called the accidental disability benefit or dismemberment benefit.


Accidental disability benefit in term insurance


While a term insurance policy typically pays the sum assured only in case of the death of the insured individual, by opting for the accidental disability benefit, you have a way around that.

If the insured individual meets with an accident that leaves them permanently partially disabled, the policy will pay a percentage of the sum assured to the policyholder for the next 10 years or so.


This is one of the very crucial term plan accidental benefits because it helps make up for the loss of the insured’s income source. Accidents, while they can spare the life of a person, can also leave them with dismemberment or loss of bodily functions. This often leads to loss of employment and adds financial distress when the individual and their family are already suffering emotionally.


The percentage of the sum assured and the period for which it is paid depends on the extent of the disability, the severity of the burns, and other specific factors related to the term insurance policy.


Who should opt for the accidental death benefit and disability rider#?


A term plan with accidental benefits is typically recommended to those primary providers of a family who:


  • Travel frequently for work.

  • Work in dangerous conditions.


However, accidents are unforeseen events that can come knocking at anybody’s door. Hence, it is wise to opt for the accidental death benefit rider# when buying a term insurance policy. This is because even those who do not work in dangerous conditions or travel frequently can often find themselves in a horrific accident. It is a cautious move to make on your part to add this rider# to your term insurance plan.




Now that you know the two types of accidental benefits - accidental death and disability - that you should look for when getting term insurance, ensure you do not skip them. There’s a reason why the older, wiser people say things like ‘better safe than sorry’. You can never be too cautious when it comes to ensuring a bright and stable future for your family.


Tata AIA Life Insurance offers both the accidental death benefit and the accidental disability benefit as one comprehensive rider#. The Accidental Death and Dismemberment Rider# covers all bases by being farsighted. It not only pays a lump sum amount to your family in case of your untimely demise, but it also ensures that your life is financially easier if you suffer from burns, disability, or dismemberment due to an accident.


You can take a look at the host of other benefits Tata AIA Life Insurance offers, along with the valuable riders# provided.



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