Term vs. Accidental Death Life Insurance

Short Answer

The main difference between term life insurance and accidental death life insurance (ADB) is when the coverage pays out:

Term life insurance: Typically pays out regardless of how you die, with very few exceptions. 

Accidental Death: Pays out only if your death is accidental. 

While it may seem like a no-brainer to choose term life insurance every time, there are situations in which ADB can make sense.  We’ll cover the details on both to help you decide which plan is right for you. 

In This Article

According to the Centers for Disease Control and Prevention, just 5.4% of the deaths in the U.S. in 2015 were accidental.  So, for most people, Accidental Death coverage isn’t enough.  But for some people, it might be wise to use it as supplemental coverage to a term life insurance policy. 

Here’s a breakdown of each coverage type and which you might consider choosing. 

Term Life Insurance

A term life insurance policy offers broad coverage that pays out when you die with very few exceptions.  For example, your loved ones may not receive a payout if you commit suicide within one or two years.  Or, if you’re a commercial airline pilot, your policy may include an exclusion that doesn’t cover you if you die while flying. 

Term lengths typically range from five to 30 years.  If you die when the policy is in force, you’re covered.  But if you outlive your policy, you get nothing in return.  You can, of course, renew your policy when it ends but you’ll pay a higher premium because you’re older, and potentially also due to medical issues you may have developed in the meantime. 

Term life insurance is relatively cheap, especially if you’re young and healthy.  For example, a healthy 25-year-old female could pay as low as $12 per month for a 20-year policy with a $250,000 death benefit.  Check your rate right now. 

Accidental Death Insurance

You can purchase Accidental Death Insurance as a standalone insurance policy.  It only pays out, however, if you die in an accident.  It is still a great option to consider if you have pre-existing conditions that make term life insurance prohibitively expensive such as cancer, heart attack, or poor financial standing. 

In fact, you are asked no questions about your health or income on the application.  It is surprising easy to apply and get.  Most of Leap Life’s customers get their Accidental Death life insurance in just one business day. 

In addition to excluding all non-accidental deaths, an ADB policy might not pay out if your death doesn’t occur shortly after the accident — usually within a few months. 

Because Accidental Death coverage isn’t as robust as what you’d receive with a Term Life insurance policy, it’s typically cheaper.  For example, a healthy 25-year-old woman could get a policy with $250,000 of coverage for $6.45 a month from Mutual of Omaha. 

Which Should You Get? 

Earlier, we mentioned that accidental deaths made up only 5.4% of all deaths in the U.S. in 2015.  But if you look at certain age groups, the percentage is much higher. 

For example, for people ages 25 to 34, 38.4% of deaths were a result of an accident.  For people ages 15 to 24, the percentage was 41%. 

So, if you’re young, you might want to consider starting with Accidental Death coverage.  But it’s also important to consider that the majority of deaths in those age groups are non-accidental. 

Also, if you develop a health condition or terminal illness, having Accidental Death coverage alone won’t do you any good, and it’ll be too late by then to get a cheap term life insurance policy. 

To get started on creating your life insurance strategy, get a free consultation with one of our licensed life insurance coaches.  They can help you learn more about the details of each of these policies and give you a quote to fit your budget. 

Get your perfect life insurance match today. 

How much life insurance do you really need?  Find out using the Needs Calculator. 

Ben Luthi is a freelance writer who covers insurance, credit cards, student loans, and other personal finance topics.  His work has appeared in publications like USA Today, The Christian Science Monitor, Credit Karma, NerdWallet, Money, and more.