3:53 AM
Malik Muhammad Usman Awan
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| Accidental death and dismemberment insurance |
In the event of an accidental death, this insurance will pay benefits in addition to any life insurance held by the client. This is called double indemnity coverage and is often available even when accidental death insurance is merely an add-on to a regular life insurance plan.Some of the covered accidents include traffic accidents, exposure, homicide, falls, heavy equipment accidents, and drowning. Accidental deaths are the fifth leading cause of death in the U.S.as well as in Canada.
Accidental death insurance is not an investment vehicle and thus clients are paying only for sustained protection. Insurance premiums are expected to rise in time. Most policies have to be renewed periodically (with revised terms), although the client's consent with renewal is often implicitly assumed.
Common exclusions
Every insurers maintains a list of events and circumstances that void the insured's entitlement to his or her accidental death benefit. Death by illness, suicide, non-commercial radiation, war injury,and natural causes are generally not covered by AD&D. Similarly, death while under the influence of any non-prescribed drugs or alcohol is most likely exempt from coverage. Overdose with toxic or poisonous substances and injury of an athlete during a professional sporting event may void the right to claim too.
Some insurance carriers will tailor their clients' coverage to include some of the above risks, but every such extension will be accompanied by increased premiums.
Due to these restrictions, the process of claiming the benefit may be relatively lengthy; the deceased client may have to undergo autopsy and the accident may have to be officially investigated before a claim is approved by the insurer.
