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August 15, 2019

Designating an Accidental Death Insurance Beneficiary: What to Consider

accidental death insurance

If you’re considering purchasing an accidental death insurance policy, there are a few things to consider, including whom to name as your beneficiary.

Accidental death insurance pays a benefit when the insured dies from a death that is “strictly due to an accident,” according to Investopedia.1 Investopedia notes that the benefit paid to the beneficiary of the policy is often a clause or rider to a life insurance policy, and is “usually an amount paid in addition to the standard benefit payable if the insured died of natural causes.”

Accidental death insurance can also be purchased as a stand-alone policy, regardless if the insured has life insurance or not. But while life insurance policies pay a benefit to the beneficiary “regardless of the cause of death,” accidental death & dismemberment policies “pay out only if you are killed or injured in an accident,” according to Nerd Wallet.2 (It’s important to note that accidental death & dismemberment policies pay certain amounts when the insured has an accidental death or dismemberment, and you should understand your policy well to understand what it will and will not cover.)

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So if you decide to purchase an accidental death policy, whether as a rider or an individual policy, you should carefully consider the person you wish to name as your beneficiary, just as you would for a life insurance policy.

ValuePenguin tells us that since accidental death & dismemberment insurance only pays as a result of a covered accident, there is a “much lower premium than you would pay for a traditional life insurance policy,” and since accidents are a more common type of death for young adults, “it’s a low-cost way to increase your life insurance coverage if you’re a young parent or have significant debt that would be passed on to others, such as small business loans.”3

So, since an accidental death policy is similar to a life insurance policy since beneficiaries receive a payout – except only in death that is the result of a covered accident – similar considerations should be taken when naming a beneficiary. ValuePenguin tells us that when naming a beneficiary for a life insurance policy, “aside from minors, insurers don’t have rules on who you name as a beneficiary,” and if you choose an individual to be your beneficiary, he or she “can be a relative, child, spouse, friend or anyone else you happen to know.”4 ValuePenguin notes an exception, however, if you are married and live in a common property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), in which case your spouse usually must “ waive their rights if you want to designate someone else as beneficiary.”

So if you’re buying a life insurance policy, an accidental death policy, or both, consider carefully whom you’d like to name as beneficiary. Speak with a financial advisor for guidance on naming a beneficiary, and on the amount and type of coverage you should buy. Research any policy you’re considering carefully so you understand its limitations and how the beneficiary process works. If you have any questions about a policy, contact your licensed insurance agent.


  1. Investopedia, "Accidental Death Benefit," 2019
  2. Nerd Wallet, "Term Life Insurance vs. Accidental Death & Dismemberment," 2017
  3. ValuePenguin, "What is Accidental Death & Dismemberment (AD&D) Insurance?" 2018
  4. ValuePenguin, "Choosing a Life Insurance Beneficiary & How They Can Claim the Policy," 2018

Categories: Accident Insurance, Life Insurance, Insurance

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