What is the Difference Between Life and Accident Insurance?

With so many products on the market to protect you, it can be overwhelming to figure out the ones you need and the ones you don’t. For example, life insurance and accident insurance policies provide coverage in the event of your death. However, one can also pay out if you are severely injured and one only pays upon your death.

Life Insurance

Life insurance provides a benefit to your loved ones in the event of your passing. If the policyholder’s death occurs during the term of the policy, the beneficiaries will receive the payout (also known as a death benefit) amount on the policy. Life insurance policies are purchased for a specific period or can be purchased for the entire lifetime of the insured. With life insurance, you can select the amount of the death benefit. There are two main types of life insurance offered, those are:

  • Term Life Insurance – Death benefit for a specific period of time.
  • Whole Life Insurance (also known as Permanent Life) – Death Benefit for the life of the insured.

There are other types of life insurance policies, such as Universal Life, where the value can grow. They are tied to different investments. However, it is always best to discuss your needs with a licensed life insurance professional.

Accident Insurance

Accident insurance, also known as Accidental Death and Dismemberment (AD&D) Insurance, is a kind of policy that provides coverage for a severe injury or accidental death due to an unforeseen accident. This type of policy can be purchased as a rider to a life insurance policy, or it can be purchased as a stand-alone policy.

To receive an insurance payout from accident insurance, the death or dismemberment must be proven to be the result of a covered accident. Specific injuries may result in a partial payout of the policy. Accident insurance may provide coverage for the following:

  • Loss of speech and hearing.
  • Loss of sight in one or both eyes.
  • Loss of an arm or a leg or a thumb or index finger.

The Differences

The most significant difference between life insurance and accident insurance is that life insurance covers instances of death resulting from illnesses or natural causes. Accident insurance does not need to be triggered by a death for a payout. However, accident insurance may provide coverage for death resulting from certain hobbies or jobs that life insurance does not cover.

To learn more about the differences between life insurance and accident insurance and which one fits your needs, contact the professionals a HealthcareInsurance.company at (855) 401-8383. Our licensed insurance experts will be happy to answer any questions you have.