What Is The Difference Between Accidental Death Vs Whole Life Insurance?

By Lisa Olsen Posted in Life Insurance News
Accidental death, sometimes referred to accidental death and dismemberment insurance is a policy that pays out additional benefits if the policy holder’s cause of death is not a work-related accident.Death in a car accident or a climbing accident would qualify under this policy. Also, a portion of the funds would be paid out to the policy holder if they lost an appendage or one of their senses (sight, hearing) in an accident. This type of insurance is for accidental death only and would not pay a death benefit if the policy holder died from an illness, suicide or natural causes.

There are four types of accidental death insurance; Voluntary, Group Life Supplement, Travel Accident or Business Trip, and Defendants. Voluntary accidental death insurance would be purchased as a single policy. Group Life Supplement would be an additional purchase to supplement an existing policy. Travel Accident or Business Trip insurance is for accidents on trips, whether for business or pleasure. This type of policy would be ideal for someone who travels a lot. A Dependent’s policy could be purchased for any dependent including children and disabled adults.
Whole Life Insurance

Simply a whole life policy covers the whole life of the policy holder. Premiums are typically paid for a certain number of years (ten to twenty) but the insurance remains active for the entire life of the person or until they reach endowment age. The age of endowment is usually 95+ at which point the policy holder can request the cash value of the policy or is can be paid out like an annuity.

Which Is Better

These plans are very different and serve a very different purpose. Businesses will sometimes take out Business Trip Accidental Death on their employees that travel a lot, leaving a portion for the dependents of the policy holder and pocketing the rest. Accidental Death can be added as a supplement to whole life insurance but usually whole life insurance covers unexpected or accident death within the policy itself. However, it does not cover dismemberment like the Accidental Death policies.