What Is an Accidental Death Rider?

••• Thinkstock/Comstock/Getty Images

Life insurance is important to many individuals who have a family. The proceeds from a life insurance policy can provide much needed cash to cover the family's expenses. An accidental death rider is an additional insurance component that can only be purchased in conjunction with a regular insurance policy.

Life Insurance Basics

Life insurance is an insurance policy that pays out a set dollar amount upon the owner's death. Life insurance is often used to help provide for the insured's spouse and children, and the proceeds from the policy may also be used to cover final expenses such as funeral costs and medical bills. Most life insurance premiums are paid through a monthly, quarterly or annual payment which the insurance company invests to earn money over time. Some insured even take loans from the cash balance of an insurance policy during their lifetime.

Accidental Death Rider

A rider is an addition that can be added to a standard life insurance policy. Insurance riders typically offer increased or modified protection to the insurance policy and may cost an additional fee on top of the standard premium. An accidental death rider provides an additional benefit if the insured's death is accidental, notes insurance website, Wholesale Insurance. Accidental death riders are commonly called double indemnity policies because they provide double the death benefit payout or up to twice or triple the face value of the policy. A $100,000 insurance policy pays out an additional $100,000 for a total of $200,000 with a standard accidental death rider.

Qualifying Accidental Deaths

Although each individual insurance provider may differ on the definition of accidental death, most insurers include everything aside from a death that occurred from natural causes, suicide or disease. In some cases, a life insurance provider may have to conduct an investigation to confirm accidental death before releasing any proceeds to the policy beneficiaries. If an investigation reveals the death did not occur due to accidental circumstances, the insurer may not honor the accidental death rider.

The Need for Accidental Death Riders

An accidental death rider may seem like an unnecessary addition to some, but insurance information website, Life Insurance Hub recommends an accidental death rider particularly for young families. Life insurance is designed to protect and provide for the family when the insured dies and can no longer bring income into the household, but the cost of life insurance often means a young family is unable to afford adequate coverage. An accidental death rider provides extra protection for little cost while a family works to build their financial safety net.