Many term insurance plans offer riders and the most common one you will come across is the Accidental Death Benefit Rider (ADBR or ABR). Sometimes this is combined with Disability (due to Accident) and called ADBR.
If you are evaluating a term insurance plan, we are sure you must have considered buying the Accidental Death Benefit Rider as an attachment to your term insurance plan. And there are many who have the dilemma – should I really attach it? is it worth?
Accidental Death Benefit Rider – how does it work?
We will use a simple example to explain how ADBR works.
Let’s say you plan to buy a term insurance plan with a Sum Assured (Life Insurance cover) of Rs. 1 crore. This generally covers you from all kinds of deaths (except suicide in the first year) including accidental death, death from disease or illness, natural disasters and calamities, etc. So if you were to die in a plane crash, or because of a heart attack, your nominee would get Rs. 1 crore.
But when you are young and in your 30s, you are more likely to die in an accident rather than because of an illness. Nearly 80% of death claims for those who die young (< 45 years of age) are because of accidental death. So should you not get some additional cover just in case it were to happen to you? It is definitely worth a thought.
In our view, you MUST have additional accident protection. And that is exactly what Accidental Death Benefit Rider offers. In the example above, if you were to attach the rider for Rs. 50 lakhs, and were to indeed die in an accident, your nominee would receive Rs. 1.50 crores. The ADBR (or ABR) rider gives extra protection from accidental death.
Please note, however, that even if you do attach the ADBR rider to your term insurance plan, but do not die because of an accident, your nominee would get only the Sum Assured from the base Term Insurance plan, i.e. Rs. 1 crore in the example here. So the ADBR Sum Assured of Rs. 50 lakhs is payable only if death happens in an accident, but the base Term Insurance plan Sum Assured is payable on any kind of death.
Double payout for Accidental Death Benefit Rider
Some companies offer double the payout of ADBR (i.e. Rs. 50 lakhs x 2 = Rs. 1 crore, which means a total of Rs. 2 crores including base Term Insurance Plan) in case the person who has bought an ADBR dies in a bus / train / ship / plane / any other mass transport vehicle wherein he/she had purchased a valid ticket. This is company-specific, though, and there could be some variations.
Accidental Death Benefit Rider – What it Includes
For the purpose of an ADBR payout, any accidental death caused by an external, violent, unforeseeable and visible force and which occurs independently of any other cause within x days (generally 90-180 days for most companies) of such an incident or trauma, is covered by this rider. Some other examples of accidents are…
– Death from falling off a building
– Death from hitting your head in the bathroom
– Drowning in a river when you go for a picnic, or in a swimming pool of your building
– Lightning strike or earthquake of any other similar act of God
– Electric shock at home or somewhere else
– Death from a Snake bite, Leopard bite, etc. (not mosquito bite 🙂 )
What is important is that the postmortem should clearly mention that it is an ‘Accident’.
Accidental Death Benefit Rider – What it Excludes
The Accidental Death Benefit Rider Sum Assured will not be payable if the death is caused by any of the following.
(i) Attempted suicide or self inflicted injuries while sane or insane, or whilst the Life Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or medically sane or insane.
(ii) War (declared or otherwise), terrorism, invasion, act of foreign enemy, hostilities, civil war, martial law, rebellion, revolution, insurrection, military or usurper power, riot or civil commotion.
(iii) Service in the armed forces, or any police organization, of any country at war or service in any force of an international body.
(iv) Committing an assault, a criminal offense, an illegal activity or any breach of law with criminal intent.
(v) Taking or absorbing, accidentally or otherwise, any intoxicating liquor, drug, narcotic, medicine, sedative or poison, except as prescribed by a licensed doctor other than the owner of this policy or the Life Insured.
(vi) Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty.
(vii) Body or mental infirmity or any disease.
(viii) Participation in aviation other than as a fare-paying passenger in an aircraft that is authorized by the relevant regulations to carry such passengers between established aerodromes.
(ix) Engaging in aerial flights (including parachuting and skydiving)
(x) Engaging in hazardous sports or pastimes e.g. taking part in (or practicing for) boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing, pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed motor sport.
The exact exclusions will depend on the company. Do refer to the ADBR Rider brochure to get details.
Accidental Death Benefit Rider – What does it Cost?
Accidental Death Benefit Rider premium generally costs just Rs. 0.50 for every Rs. 1,000 Sum Assured. It does not depend on gender, age, period of the term insurance plan, etc. So for Rs. 50 lakhs of ADBR, annual premium will be just Rs. 2,500. Some General Insurance companies could give your cheaper rates through a Personal Accident Insurance plan, but unless you are sure you will take the effort to find out about it and eventually buy it, just go ahead and get the additional protection from Accidental death with your Term Insurance plan itself. It is very cheap anyway.
ADBR included with Disability or Dismemberment can be more expensive since it gives protection against Total Disability and incapacitation due to loss or arms and/or legs.
Accidental Death Benefit Rider – When can you attach or detach?
Most companies allow you to buy it anytime during the term of the policy, as long as the base policy is in force. So even if you have already bought a term insurance plan, speak to the company and get the ADBR attached.
ADBR cannot be bought standalone.
So you are now ready to go ahead and buy your term insurance plan with Accidental Death Benefit Rider. But before you fill up the application form, don’t forget to read what precautions to take.
Hello,
Appreciate your quick reply & that does help clear my doubts.
I will go through the link for sure.
Thanks,
Pankaj 🙂
Hi Pankaj,
1. No. A base Term Plan cover all kinds of death i.e. both natural and unnatural death (except suicide in the first year). An accident rider is an additional/extra protection that is applicable ONLY if the death is accidental, not otherwise. So if it is otherwise, only the base term plan cover benefit is paid out. Hope this is clear.
2. For a business person who is earning a salary, a copy of IT returns filed with the Income Tax Department is good enough for almost all companies as proof of income. Depending on the company and the sum assured you opt for, you may have to furnish last 1, 2 or 3 years statements.
Here is a link to compare term insurance plans online.
https://www.mintwise.com/term-insurance-compare
Hello Team,
Fantastic piece of information posted above. Appreciate your efforts to enlighten people like me who are new to the world of insurance.
Would you mind answering 2 queries of mine please?
1. Suppose I buy a term insurance policy & not able to include the Accidental Death Rider. So is that the Base policy would not cover/come into act if the Insured person dies because of an accident and cover ONLY natural death & death due to illness covered in the term insurance?
2. Also, if I want to buy a term insurance for my wife individually (coz joint life option wont help her get covered for accidental death & disability), in that case what documents do I need to submit provided she owns a business with yearly income of approx Rs 2 lacs?
Thanks you!
Hi Manikandan, by ‘all in one’ term plans, do you mean those which include accident, critical illness and terminal benefits, etc.? If yes, these are add-on benefits which are relevant for different individuals differently. e.g. if you have a very good health cover along with a top-up cover, a CI plan may not be necessary. Accident benefit is a good add on to have.
You can check the comparison in the link below.
https://www.mintwise.com/term-insurance-compare
can u pls tell me about all in one term plans available in market & its comparison chart.
Hi Investor. That’s a very good question. We realized we haven’t answered that anywhere and will put up an article on it. Thanks for that.
In short, the difference is that in an Accident rider attached to a term insurance, the benefit is paid only on Death due to accident, whereas in a Personal Accident plan it will be the medical expenses incurred due to an accident and/or death due to an accident. We would recommend a Personal accident plan in case you dont have adequate health insurance. Otherwise, a rider is fine.
This is well written. What is the difference between a Personal Accident Insurance policy and an Accident rider attached to the term insurance plan? Are the benefits the same? please clarify.
Yes you could do that, Madhur. Having said that, one could keep it on till retirement since they are very cheap and there is no harm getting some extra cover while you are still working.
Thanks for the appreciation, Madhur.
Yes you could do that, Madhur. Having said that, one could keep it on till retirement since they are very cheap and there is no harm getting some extra cover while you are still working.
Thanks for the appreciation, Madhur.
Awesome articles on Term Insurance..Very helpful to take an informative decision. KUDOS!
As you said most of the deaths at young age are due to accidents. So one should actually ‘detach’ it after he crosses say 45 or 50 years of age, when one is more prone to illness than to accidents.
Awesome articles on Term Insurance..Very helpful to take an informative decision. KUDOS!
As you said most of the deaths at young age are due to accidents. So one should actually ‘detach’ it after he crosses say 45 or 50 years of age, when one is more prone to illness than to accidents.
Thanks for your inputs. This discussion has definitely helped come closer to the final decision. For the records, here is what I am going with finally.
1. HDFC Life with Extra Life option. Still trying to decide whether I should go for 75L or 1Cr.
2. Continuing my AEGON Term Life policy which has an AD Rider as well. Got an explicit letter from the company stating that the policy is valid & benefits would be honoured.
3. Getting a PAP from Bharti AXA for 30L.
Thanks for your inputs. This discussion has definitely helped come closer to the final decision. For the records, here is what I am going with finally.
1. HDFC Life with Extra Life option. Still trying to decide whether I should go for 75L or 1Cr.
2. Continuing my AEGON Term Life policy which has an AD Rider as well. Got an explicit letter from the company stating that the policy is valid & benefits would be honoured.
3. Getting a PAP from Bharti AXA for 30L.
Thanks for your replies. The discussions over the last few weeks have really helped me narrow down take a final decision. For the records, here is what I have decided:-
1. On number 1, I will go ahead with the Extra Life option. I too liked the option after going through the details & your opinion confirms that. I understand it does not cover everything that a PA does & I would probably add that as well.
2. On number 2, I have received the letter from Aegon explicitly stating my case details & their confirmation that they will honor the death benefits. They mentioned that they would put it along with my policy details as well. So I will continue with this; but as you say this would be a surplus cover & not the sole one.
Thanks again for all the help.
Thanks for your replies. The discussions over the last few weeks have really helped me narrow down take a final decision. For the records, here is what I have decided:-
1. On number 1, I will go ahead with the Extra Life option. I too liked the option after going through the details & your opinion confirms that. I understand it does not cover everything that a PA does & I would probably add that as well.
2. On number 2, I have received the letter from Aegon explicitly stating my case details & their confirmation that they will honor the death benefits. They mentioned that they would put it along with my policy details as well. So I will continue with this; but as you say this would be a surplus cover & not the sole one.
Thanks again for all the help.
Sudipto, we realize from your question that OCIs are really under-serviced and worse, there is hardly any information available for them. It has triggered internal research in that area – a big thanks for the spark.
1. The Extra Life option from HDFC Life is indeed a good one, and you could go for that since it looks really inexpensive going by the numbers you have quoted. But do remember that this covers only Death in an accident. In case you were to survive a serious Accident (which we will always hope you do), expenses such as hospitalization, loss of income, disability, etc. are NOT covered in the Extra Life option (or any other offered by Life Insurance companies). Only a PA policy covers that (most of them also cover death). So in addition to Extra Life, we’d recommend you have a PA plan as well.
2. We aren’t the best legal experts in town but we’d look at your situation a little differently.
If this cover is a ‘surplus’ and doesn’t impact your family much, go ahead and continue. But if you are really betting on that cover to help your family tide over the challenges they would have in your absence, would you really take the risk of a possible rejection???
And even the legal expert were to say that the cards are in your favor (which is the way it appears at the face of it), what’s the guarantee?
We hope you get our perspective. And we hope it helps you to arrive at the final decision, which will be entirely yours.
Good luck, Sudipto.
Sudipto, we realize from your question that OCIs are really under-serviced and worse, there is hardly any information available for them. It has triggered internal research in that area – a big thanks for the spark.
1. The Extra Life option from HDFC Life is indeed a good one, and you could go for that since it looks really inexpensive going by the numbers you have quoted. But do remember that this covers only Death in an accident. In case you were to survive a serious Accident (which we will always hope you do), expenses such as hospitalization, loss of income, disability, etc. are NOT covered in the Extra Life option (or any other offered by Life Insurance companies). Only a PA policy covers that (most of them also cover death). So in addition to Extra Life, we’d recommend you have a PA plan as well.
2. We aren’t the best legal folks in town but we’d look at your situation a little differently.
If this cover is a ‘surplus’ and doesn’t impact your family much, go ahead and continue. But if you are really betting on that cover to help your family tide over the challenges they would have in your absence, would you really take the risk of a possible rejection???
And even the legal expert were to say that the cards are in your favor (which is the way it appears at the face of it), what’s the guarantee?
We hope you get our perspective. And we hope it helps you to arrive at the final decision, which will be entirely yours.
Good luck, Sudipto.
I did some more research on this & talked to some of the companies directly as well. Looks like HDFC is the only eligible Term plan which would allow OCI’s online for new policies. I have 2 additional questions:-
1. In the HDFC’s Click2Protect+ Term plan they have an extra life option which basically covers AD. Seems like a v. good option from a premium perspective — something like 5 – 5.5K extra would give an additional cover of 1 Cr for AD. A separate PAP from market — Bharti AXA’s for example only covers 30L for about 3.5K. I am leaning towards adding this extra option with when I opt for my HDFC Term plan. Your thoughts on whether I should be adding this cover ?
2. I am in the process of discontinuing my existing policies. In the course of my detailed conversations with Aegon’s service agent, he checked back with his back-end service team and is ready to give me a official letter confirming that I can continue with my policy & that the death benefits would be honored. In that case would you say it would be safe to continue the policy from a legal perspective ? Can you comment on that ? I mean post the letter if I continue with the policy & if ever the death benefits are needed can they reject saying that the insured was not a citizen ? Please advise.
I did some more research on this & talked to some of the companies directly as well. Looks like HDFC is the only eligible Term plan which would allow OCI’s online for new policies. I have 2 additional questions:-
1. In the HDFC’s Click2Protect+ Term plan they have an extra life option which basically covers AD. Seems like a v. good option from a premium perspective — something like 5 – 5.5K extra would give an additional cover of 1 Cr for AD. A separate PAP from market — Bharti AXA’s for example only covers 30L for about 3.5K. I am leaning towards adding this extra option with when I opt for my HDFC Term plan. Your thoughts on whether I should be adding this cover ?
2. I am in the process of discontinuing my existing policies. In the course of my detailed conversations with Aegon’s service agent, he checked back with his back-end service team and is ready to give me a official letter confirming that I can continue with my policy & that the death benefits would be honored. In that case would you say it would be safe to continue the policy from a legal perspective ? Can you comment on that ? I mean post the letter if I continue with the policy & if ever the death benefits are needed can they reject saying that the insured was not a citizen ? Please advise.
ok – thanks. I will check out some portals.
ok – thanks. I will check out some portals.
1. Try a product comparison portal.
2. AD is a subset of PA. If you get PA, you probably don’t need AD. Cost vary because PAs comes in various forms with multiple features. Again use a product comparison portal which has both AD and PA to see which is best.
1. Try a product comparison portal.
2. AD is a subset of PA. If you get PA, you probably don’t need AD. Cost vary because PAs comes in various forms with multiple features. Again use a product comparison portal which has both AD and PA to see which is best.
On 1 –> So how do I find out which companies offer term insurance to OCIs, online ?
On 2/3 –> Yes, I do plan to consolidate down to 2 plans. My question is if the plans have a provision of AD rider then should I opt for that or take a standalone Personal Accident cover?
On 1 –> So how do I find out which companies offer term insurance to OCIs, online ?
On 2/3 –> Yes, I do plan to consolidate down to 2 plans. My question is if the plans have a provision of AD rider then should I opt for that or take a standalone Personal Accident cover?
Sudipto, thanks for the appreciation. Responses below.
1. Plenty. Very few companies offer term insurance to OCIs, and even fewer offer it online. You will also need to produce additional documentation.
2. Have you checked what is the total cover you need in the first place? This link can perhaps help.
https://www.mintwise.com/blog/calculate-life-insurance-coverage/
Also, more than 3 plans is not advisable, becomes too difficult to manage and you end up losing High Sum Assured discount making it more expensive as well. Do restrict to just 3 at best. We specifically do not recommend companies on this website so you will have to decide the brand and the product yourself. As far as riders go, it is advisable to have Accident and Disability as separate riders. You could choose a standalone Personal Accident cover which is generally more comprehensive that a Accident Rider in Life Insurance products.
3. Yes a separate AD / Disability policy is better if you are choosing term insurance which do not offer these options as attachments.
Hope this helps.
Sudipto, thanks for the appreciation. Responses below.
1. Plenty. Very few companies offer term insurance to OCIs, and even fewer offer it online. You will also need to produce additional documentation.
2. Have you checked what is the total cover you need in the first place? This link can perhaps help.
https://www.mintwise.com/blog/calculate-life-insurance-coverage/
Also, more than 3 plans is not advisable, becomes too difficult to manage and you end up losing High Sum Assured discount making it more expensive as well. Do restrict to just 3 at best. We specifically do not recommend companies on this website so you will have to decide the brand and the product yourself. As far as riders go, it is advisable to have Accident and Disability as separate riders. You could choose a standalone Personal Accident cover which is generally more comprehensive that a Accident Rider in Life Insurance products.
3. Yes a separate AD / Disability policy is better if you are choosing term insurance which do not offer these options as attachments.
Hope this helps.
First of all A++ on some great info regarding Term Life insurance.
I have few questions listed below:-
1. I am a dual citizen (US passport + Indian Overseas Citizen of India); but now permanently based India for over 7 years. So are there any restrictions which apply to me to buy any of the online term plans ?
2. I have currently 3 term plans –> (LIC – 25L + Aviva – 50L + Aegon – 50L). I am planning to both consolidate & increase my cover a bit in the process. So I planning to take a 1 Cr cover from Max Life & in addition keep one of either Aviva or Aegon (both have 50L cover). Now my dilemma / question is this –> Based on the IRDA’s report of 5 parameters on your site Aviva wins hands down over Aegon & I should logically stop that policy. But with the Aegon policy, I additionally have AD & WoP riders which I don’t have with Aviva. Now I am not sure which of the policy’s to stop. Please advise pros / cons based on the above points.
3. Following on from the above question, I would like to add a AD rider to Max Life policy. But I was advised that it would be much cheaper if I were to get a separate AD / Disability policy ? Is that generally the case ?
First of all A++ on some great info regarding Term Life insurance.
I have few questions listed below:-
1. I am a dual citizen (US passport + Indian Overseas Citizen of India); but now permanently based India for over 7 years. So are there any restrictions which apply to me to buy any of the online term plans ?
2. I have currently 3 term plans –> (LIC – 25L + Aviva – 50L + Aegon – 50L). I am planning to both consolidate & increase my cover a bit in the process. So I planning to take a 1 Cr cover from Max Life & in addition keep one of either Aviva or Aegon (both have 50L cover). Now my dilemma / question is this –> Based on the IRDA’s report of 5 parameters on your site Aviva wins hands down over Aegon & I should logically stop that policy. But with the Aegon policy, I additionally have AD & WoP riders which I don’t have with Aviva. Now I am not sure which of the policy’s to stop. Please advise pros / cons based on the above points.
3. Following on from the above question, I would like to add a AD rider to Max Life policy. But I was advised that it would be much cheaper if I were to get a separate AD / Disability policy ? Is that generally the case ?
Excellent.
Excellent.
Yes the difference was only 7 laks for Rs.40. I have taken term insurance of 1.3 Cr without any accidental insurance from Max Life.
Yes the difference was only 7 laks for Rs.40. I have taken term insurance of 1.3 Cr without any accidental insurance from Max Life.
Yes you could do that if you think that 30 lakhs covering everything is better than 37 lakhs covering only accidents. But before you do that, do check the rates again – the difference of 7 lakhs is looking too less.
Very interesting observation and good thinking, Kamal.
Yes you could do that if you think that 30 lakhs covering everything is better than 37 lakhs covering only accidents. But before you do that, do check the rates again – the difference of 7 lakhs is looking too less.
Very interesting observation and good thinking, Kamal.
Hi Mintwise,
I m planning to buy a Term plan from one of the insurance company with sum assured of Rs.1 Cr for the period of 30 year.
Along with term plan, option of buying of accidental insurance is also available. The insurance company is offering an accidental insurance of Rs.37 lakhs for an additional premium of say Rs.2500 per annum. Further, it was checked that for the same incremental premium of Rs.2500, it is possible to buy a term plan for Rs.1.3 Cr.
Kindly advise, is it not beneficial to buy a term plan of Rs.1.3 Cr rather than buying a term plan of Rs.1 Cr with accidental insurance of Rs 37 lakhs.
Thanks is advance.
Hi Mintwise,
I m planning to buy a Term plan from one of the insurance company with sum assured of Rs.1 Cr for the period of 30 year.
Along with term plan, option of buying of accidental insurance is also available. The insurance company is offering an accidental insurance of Rs.37 lakhs for an additional premium of say Rs.2500 per annum. Further, it was checked that for the same incremental premium of Rs.2500, it is possible to buy a term plan for Rs.1.3 Cr.
Kindly advise, is it not beneficial to buy a term plan of Rs.1.3 Cr rather than buying a term plan of Rs.1 Cr with accidental insurance of Rs 37 lakhs.
Thanks is advance.
What is best depends completely on you individual requirements. We only give information based on fact and do not recommend any specific companies or products per se.
Sorry but we only give information based on fact and do not recommend any specific companies or products.
Please suggest me the best term plan as well as accidental plan
Please suggest me the best term plan as well as accidental plan
It works! 🙂
Test
Aravind, you can buy it from anywhere but do make sure you fill up the application form yourself.
Aggregation sites give you the advantage of comparing features vis-a-vis pricing, thereby allowing you to weigh the value of each product/brand before taking the final call. Service-wise or otherwise, there is no difference whether you buy it directly from the insurer’s website or through the aggregation website.
Aravind, you can buy it from anywhere but do buy it online and make sure you fill up the application form yourself.
Aggregation sites gives you the advantage of comparing features vis-a-vis pricing, thereby allowing you to weigh the value of each product/brand before taking the final call. Service-wise or otherwise, there is no difference whether you buy it directly from the insurer’s website or through the aggregation website.
Hi Mintwise,
Really awesome articles. Appreciate the team vision.
Quick question: From whom should I buy the online term insurance from Insurance aggregation websites or insurance company websites?
Give me your suggestion.
Thanks in advance.
Hi Mintwise,
Really awesome articles. Appreciate the team vision.
Quick question: From whom should I buy the online term insurance from Insurance aggregation websites or insurance company websites?
Give me your suggestion.
Thanks in advance.
Gaurav, please refer to our reply to the similar question above.
Gaurav, please refer to our reply to the similar question above.
That’s correct, Gaurav. Death due to inhalation of fumes or gas, both voluntary and involuntary, are excluded from Accident Rider. And that’s generally the way it is across the world. In some cases, it is covered but the pricing would be higher.
That’s correct. Death due to inhalation of fumes or gas, both voluntary and involuntary, are excluded from Accident Rider. And that’s generally the way it is across the world. In some cases, it is covered but the pricing would be higher.
In case of ADB Rider, have a query related to the exclusion point “Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty.”
If demise occurs due to car fire where the customer is trapped in the car and cannot manage to escape, the insurance company is liable to pay the base sum assured but can they deny the ADB Rider sum assured stating the customer demise occured due to inhalation of toxic fumes (asphyxiation).
In case of ADB Rider, have a query related to the exclusion point “Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty.”
If demise occurs due to car fire where the customer is trapped in the car and cannot manage to escape, the insurance company is liable to pay the base sum assured but can they deny the ADB Rider sum assured stating the customer demise occured due to inhalation of toxic fumes (asphyxiation).
With regards to the exclusions for inhaling gas or fumes, had a query if accident happens due to inhalation of poisonous gas due to being trapped inside the car, will the insurance company that offers this ADB rider, pay out the base + rider sum assured or only the base sum assured rejecting the rider pay out stating “(vi) Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty.”
With regards to the exclusions for inhaling gas or fumes, had a query if accident happens due to inhalation of poisonous gas due to being trapped inside the car, will the insurance company that offers this ADB rider, pay out the base + rider sum assured or only the base sum assured rejecting the rider pay out stating “(vi) Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty.”