Last month we had the first four articles in the Insurance You Can Do Without series. Over this week, lets look at four more types of insurance you can do without.
Accidental death insurance may be offered to you as a rider on your regular life insurance policy. It can also be purchased as it’s own policy. Accidental death insurance pays out an additional amount if you were to die from an accident.
The key issue to remember with all forms of insurance is to insure against a financial loss. You put life insurance in place so that, if you were to die, it covers your income and debts for your surviving dependants. With that said, do your beneficiaries need more money because you die in an accident? The cause of death is unlikely to change the financial loss that needs to be recovered.
The other issue with this form of insurance is the likelihood of death from an accident is 1 in 20. To pay extra for this rare chance of death is not worth the more costly premium. A lower cost term life insurance will pay out for any form of death, whether from an accident, disease, or natural causes.
If you are considering accidental death insurance because you’re concerned that you’re under-insured, it would be a better use of your money to increase the coverage on your regular life insurance.