There are two common types of accidental death cover:
- Accidental death and dismemberment (AD & D)
- Personal accident
Accidental death and dismemberment insurance
Accidental death and dismemberment insurance will pay out to your loved ones if you pass away due to accidental death.
Your loved ones can use this pay out to pay for your funeral and cover daily living costs.
It will also pay out to you if you suffer a dismemberment (the loss or loss of use of a body part or body function).
You can use this pay out to help replace any lost income you might experience from not being able to work, as well as pay for medical treatment you may need to undergo.
A payment for dismemberment is often paid on a ‘per-member’ basis.
This means that the amount paid out to you will be in relation to how many limbs (or functions) are lost.
For example, if you were to lose one arm, you’ll likely receive 50% of your pay out. However, these amounts will vary between providers.
What does accidental death and dismemberment insurance cover?
Accidental death and dismemberment will pay out for any death that is deemed accidental (for example, a car crash).
As well as paying out partially for loss of limbs (including fingers and toes) and loss of vision (loss of eyes) that is a result of an accident.
What’s covered will vary between providers so when looking into this form of cover it’s important to compare all the different options.
Personal accident insurance
Personal accident cover (sometimes known as personal injury insurance) will pay out if you suffer a serious injury.
It will also pay out to your loved ones if you pass away due to an accident.
Like with accidental death and dismemberment insurance, you can use your pay out to help cover any lost income you might experience.
This can be particularly beneficial for those who are self-employed as you won’t be paid sick pay by an employer.
Personal accident insurance can help to provide funds to help ease financial stress if you’re unable to work.
If you were to pass away, your loved ones can use the pay out to keep up with any financial commitments.
What does personal accident insurance cover?
You’ll be covered for death and injury caused by:
- Car accident
- Loss (or loss of use) of a body part
- Accident at work
- Total and permanent disability