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What You Didn’t Know About: Life Insurance Versus Accidental Death Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM
know about life insurance vs accidental death insurance

There is often some confusion between Life insurance and Accidental Death Insurance. Life Insurance and Accidental Death Insurance slightly overlap each other concerning their coverage provided; however, you need to understand the major differences between both to make proper usage of the benefits offered by both.

Life Insurance Basics

Life insurance would help in providing financial cover to your family members in case of your untimely demise. The premiums are paid either monthly, quarterly, or annually and your beneficiaries can obtain the death benefit. You can purchase a life insurance policy with various objectives like it is used as an investment tool, a saving instrument, used for risk cover, and even as a tax-saving tool.

Some of the common categories of life insurance policies available are:-

  1. Term Insurance Plans – Term Insurance Plans are a pure death risk insurance policy that provides cover for a specific term. Your nominee would obtain the death benefit in case of your demise during the term of the insurance plan.
  2. Endowment Policy – An Endowment policy, if your demise occurs during the policy tenure, then your nominee would be receiving the sum assured. However, if you survive the policy term then you would obtain the maturity benefit along with the specified bonus if any accrued.
  3.  Money-back Plans – In Money back plans, you would obtain a percentage of your sum insured on specific intervals. Life cover is provided by the Money back plan for the entire policy tenure and the entire tenure despite the benefits that have been paid out.
  4. Whole Life Insurance – Whole Life Insurance plans do not have any specific term. These plans would provide cover for the lifetime until you are paying the premium. The age for maturity is 100 years and your nominee would receive the sum insured in case of your demise before 100 years of age. However, if you survive 100 years, then you would obtain the matured endowment coverage.
  5. Annuity Plans – These plans would be helpful after your retirement as they act as a regular source of income post-retirement. Your investments into the creation of a corpus are paid off as Annuities later.

Accidental Death Insurance

Accidental Death and Dismemberment Insurance otherwise known as the AD&D Insurance would provide cover in case of your or any of your family member’s death or serious injury caused due to an accident. 

The Accidental Death and Dismemberment Insurance can cover death due to accident, loss of limb, blindness, paralysis, loss of sight, loss of speech and hearing, etc.  The monthly premium in this type of insurance is less as it provides a limited form of life insurance. No medical tests are required for availing the coverage under this insurance policy.

Life Insurance versus Accidental Death Insurance

Let us find out some of the major differences between Life Insurance and Accidental Death Insurance.

1. The Cause of Death

  • Life insurance plans would provide cover for all death which has been caused due to all causes except that of suicide. However, death caused due to suicide might also be covered by some life insurance policies after a specific waiting period.
  • Accidental death insurance would provide cover in case of death that has been caused only because of an unfortunate accident.

2. Death Condition

  • A Life Insurance plan would provide your family with financial cover if your death occurs after being affected by a disease or ailment for months.
  • In Accidental Death Insurance, the death benefit would be provided if your death happens instantly or within 180 days of the accident.

3. Variety in Plans

  • Usually, life insurance would have a plethora of options on its plans which provides a death benefit, retirement plans, and other financial goals as well.
  • However, Accidental Death Insurance would only provide cover in the form of the death benefit

4. Partial Benefit 

  • Life Insurance policy would not provide cover in case of partial loss such as the loss of speech, loss of sight, etc. unless you have purchased a rider along with your base insurance policy.
  • But, Accidental Death Insurance would provide financial cover in case of partial losses such as loss of limb or sight due to an accident.

Payout Comparison of Life Insurance and Accidental Death Insurance

 Life InsuranceAccidental Death Insurance
Death caused due to any illnessYes No
Death caused due to an accidentYesYes
Death caused due to overdose of drugsNoNo
Benefit for loss of limb, loss of sight/hearingNoYes
  • In case of your death occurring due to an accident but not instantly and after the specified period of 180 days, your nominee will not be able to receive the death benefit.
  • It must be proved that the death was caused directly because of the accident.
  • The Accidental Death Insurance does not provide coverage for deaths occurring due to adventurous activities like sky-diving, motor-racing, due to drug overdose, or situations like mental illness and wars.


So, if you are looking for options that can provide complete financial cover for your family then the best option is a life insurance policy. You can opt for taking Accidental Death Insurance along with your Life Insurance policy as a supplement. Moreover, some insurance providers would provide Accidental Death Insurance as a rider which can be taken along with your base insurance policy by paying an additional premium. Hence, you must choose your life insurance policy carefully after doing thorough research and comparison to avail maximum benefits.

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