Death insurance is not the same as life insurance because of some very distinct terms to it. It is also known as accidental death insurance and can sometimes cover dismemberment if the client wants to have it included in the policy. Life insurance pays off no matter what the reason of death is in most cases unless there are clauses for suicide and other death related issues. It is very important that you learn and understand all of the conditions of your policy and what it will cover. Don't be afraid to ask any questions before signing contracts.
So how does death insurance work?
When It Pays Death insurance only pays when there is an accidental death that is not caused by naturally. For instance, if a person passes away because of old age and the body just gives out, this is considered natural causes and would not be covered. However, if there is a car accident and death is the result, this insurance would be paid off in full to the beneficiaries.
Who Can Be Insured? Any person, no matter their age, can be insured with death insurance. It is more common for those who are younger and who would more than likely lose their life to an accident rather than natural causes. For this reason, there are very few elderly who would want to have this type of insurance because it would be a waste of money in the majority of cases.
What is Covered? Those who are seeking this type of insurance can have dismemberment added to their policy so if they are not able to work due to losing one or more limbs they have a nest egg that they can fall back on while they heal and go through the physical therapy process. Not everyone who loses a limb is rendered unable to work permanently but it can be a large financial loss for a period of time. This insurance can help to cover them and their costs until they are able to get back into the workforce again. This policy also covers any accidental death by those who are insured.