Why is accidental life insurance so inexpensive?

Life Insurance
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August 2016
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What the big headline death benefit giveth, the fine print taketh away. The price for life insurance is not set willy nilly, but rather the cost is estimated by actuaries to assess the likelihood of an event happening.

When you look at the fine print of what qualifies as an "accident," you may guess that many people actually die from an "accident."

For example: A plane crashes, and you are rushed to the hospital in critical condition. You end up dying say by heart failure, caused by the plane crash. But since you didn't actually die in the plane crash your "accidental death," policy often might now pay you a benefit.

Contrast that with regular life insurance (Term of Permanent), if you are dead you are dead. (there is fine print on regular life insurance as well, but it's generally more limited). There is higher risk that the insurance will have to pay out, so the premiums will also be higher.

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Hope this helps

By David Rae, Certified Financial Planner™, Accredited Investment Fiduciary™

Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA, SIPC, a Registered Investment Advisor. Trilogy Capital Trilogy Financial and NPC are separate and unrelated entities.  The opinions voiced in this article are for general information only and do not constitute an endorsement by NPC. NPC does not provide tax advice. www,financialplannerLA.com

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