Accidents are the fifth highest cause of death in the United States, according to the Centers for Disease Control and Prevention. They account for 123,706 deaths as of 2010. The number of emergency room visits for accident-related injuries or illnesses also is high, with 26 million people receiving treatment. Because of the statistical likelihood of being involved in an accident, some insurance companies offer accidental death insurance. This insurance is a good idea for some but isn't beneficial for everyone.
Accidental death insurance, as the name implies, pays only if you are killed as a result of an accident. Depending on the policy, it can cover items such as your funeral costs or the expenses incurred from unsuccessful medical treatment prior to death. Some policies also cover income payments, which makes it possible for your loved ones to stay on stable financial ground after you die. If your policy is listed as "accidental death and dismemberment" (AD&D), coverage extends to costs you have from the loss of a limb, and you do not necessarily need to die for the insurance company to pay.
Who Buys Coverage
Anyone can buy accidental death insurance. However, a policy makes more sense for those who are in high-risk positions such as construction workers or commercial fishermen, or for those who cannot afford regular insurance. Those who are between jobs also can buy this insurance as bare-bones coverage until their new employer can provide better coverage.
The cost of accidental death insurance policies varies depending on the coverage you select and the company you use. Prices listed by Nada Insurance as of 2010 indicate you can purchase a policy for as little as 30 cents per month, with some policies reaching $9 per month. The insurance website indicates an average cost of $60 per year, or $5 a month, as of 2010. This typically is cheaper than most health and life insurance plans.
Accidental death insurance can make sense in some situations. It is extremely cheap compared to some other plans. However, it is an extremely specific type of insurance, and as Nada Insurance points out, it is unlikely to pay as a result. You probably would be better off investing the money you have into better coverage through a life insurance or health insurance policy. Purchase accidental death insurance policies only when you cannot afford other options.
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