Does Term Life Insurance Cover Accidental Death?

Term life insurance will cover you in a wide range of situations, including death from a terminal illness like cancer or a sudden fatal illness like a heart attack or stroke. It will also cover you if your death is caused by almost any type of accident, as long the death occurs within the time limit of the policy’s term.

In most cases, it doesn’t matter what caused the death: car accident, fire, fall, or even murder. However, there are a few situations where the cause of death does matter. We’ll go over them below.

Term Life’s Potential Exclusions

Here are a few reasons why an accidental death claim could be reviewed or even rejected:

• An illegal activity caused the accidental death. If you die while committing a crime, the insurance company will most likely not pay the death benefit to your beneficiaries.
• Substance abuse was involved in the accidental death. If an accidental death involved substance abuse, the insurer may question whether it was accidental or perhaps suicide. This is always going to be a difficult thing to prove, which the insurer would have to do in order to contest the death benefit claim. It would depend on the insured’s medical history and whether they disclosed that substance use on the application. If they did not disclose repeated use, the insurer would have grounds to contest the death benefit. However, if the insured person accidentally overdoses on a drug they were prescribed by their physician, this would be covered in most cases.
• A high-risk activity caused the accidental death. This is especially applicable if you regularly participate in a high-risk activity or job and did not disclose it on your life insurance application. Insurers ask if you participate in things like auto racing, skydiving, base jumping, cliff diving, scuba diving, or other activities judged to be high-risk. They also need to know if your job entails high-risk activities like working on an offshore oil rig, flying, or fighting fires. If you answer yes, the insurer may not offer you coverage, or may charge you a higher rate. Read your contract to see if there’s an exclusion clause for death that occurs due to an accident while performing a high-risk activity. It’s all going to depend on your specific insurer and policy.

If you’re worried about exclusions or types of accidents covered, get in touch with your life insurance agent. They can help you interpret your contract (if you already have a policy) or analyze the contract of any policy you’re thinking of buying so you know what’s covered in the future.

There’s a reason it’s hard to answer the question, “Does term life insurance cover accidental death?”

That’s because, with life insurance, the answer is usually, “It depends.” We’re here to give you the right answer based on your specific situation.