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Accidental death insurance on a term insurance policy #5429838 05/15/20 11:52 AM
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MoneyJohn Offline OP
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I have term life insurance with Willian Penn that I got through SelectQuote. In the past, I had a very good experience so I used them again to get this policy but the agent I got it from is not exactly 'communicative'.

Ever since I got this policy, at least a couple of years now, I keep getting the letters to add 'Accidental Death Coverage' of a million dollars over my half-million dollar term policy. Due to my health issues, getting a policy worth more than half a million dollars is very expensive. I asked the agent of accidental death coverage is not covered in the term life. His assistant replied that it is covered (didn't elaborate on why I keep getting these letters) but I have no idea why they keep sending this letter. It adds ~$50/month to ~$100/month premium. My term policy will last for 30 years but its add-on lasts until age 75.

Does anyone have an idea what this adds, other than the million dollars upon accidental death? I have clearly mentioned to the agent (his assistant) that I am not interested in this add-on but I still keep getting these letters. So my question is, should I add this to a junk pile or it is worth taking a look (i.e. they keep sending because something is not covered under the term insurance)?

Thanks in advance.

Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5429854 05/15/20 12:06 PM
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mk378 Online Content
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What you have now covers accidental death the same as death from disease. If you add the extra, they will pay an extra million only if death was accidental instead of from disease. Accidental death is relatively uncommon so it is not as expensive as a complete policy.

Ordinary life insurance covers almost all causes of death except suicide. Common other exceptions are skydiving or flying your own plane.

Last edited by mk378; 05/15/20 12:08 PM.
Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5429871 05/15/20 12:25 PM
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In my experience (various policies from employers) that type of coverage has been packaged as AD&D - Accidental Death and Disability. Where I see value, depending on cost and personal circumstances, is in the disability portion. If I crash my mountain bike and end up in a wheelchair, it would be important to have some help with the associated costs and lifestyle adjustments.


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Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5429881 05/15/20 12:50 PM
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jstert Offline
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spend to get a disability and a long term care policy rather than cheaper ad&d, which is suboptimal when reading the fine print. also some life policies have long term care riders now.


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Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5429928 05/15/20 01:55 PM
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ecotourist Offline
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I suspect the reason they're adding it is to make your policy look better at little risk to themselves. An accidental death "booster" is often thrown in as a bonus.

Other than for young men, death of adults is usually due to cancer, heart disease, stroke, pulmonary embolus, and dare we say it suicide (none of which would be covered by accident insurance).

Would the cause of your death matter to your estate? Probably not. I'd spend that extra premium money on more life insurance.


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Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5429929 05/15/20 01:57 PM
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JohnnyJohnson Offline
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Spend the $50 a month on your ROTH IRA.


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Re: Accidental death insurance on a term insurance policy [Re: JohnnyJohnson] #5429938 05/15/20 02:02 PM
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thooks Offline
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Originally Posted by JohnnyJohnson
Spend the $50 a month on your ROTH IRA.


+1

Re: Accidental death insurance on a term insurance policy [Re: fsdork] #5429951 05/15/20 02:36 PM
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ecotourist Offline
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Originally Posted by fsdork
In my experience (various policies from employers) that type of coverage has been packaged as AD&D - Accidental Death and Disability. Where I see value, depending on cost and personal circumstances, is in the disability portion. If I crash my mountain bike and end up in a wheelchair, it would be important to have some help with the associated costs and lifestyle adjustments.

AD&D usually means Accidental Death and Dismemberment. It does not (usually) mean Accidental Death and Disability. Dismemberment means losing an arm, a leg or an eye which could be disabling but usually/often isn't.

Disability is typically due to Multiple Sclerosis (MS), stroke, heart disease, head injury, cancer, psychiatric disorders (eg schizophrenia) and cervical fractures. Most causes of disability are not related to an accident. Which means they don't get covered by AD&D insurance.

I do agree with getting Disability Insurance. You just don't get Disability insurance with an AD&D policy.

Disability at a young age is supposedly more common than death at a young age.


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Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5430034 05/15/20 04:29 PM
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Powerglide Offline
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Spend the $50/month on yourself or your loved ones while you're still alive and in good health. I'm an insurance broker.

Re: Accidental death insurance on a term insurance policy [Re: ecotourist] #5430160 05/15/20 07:07 PM
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Originally Posted by ecotourist
Other than for young men, death of adults is usually due to cancer, heart disease, stroke, pulmonary embolus, and dare we say it suicide (none of which would be covered by accident insurance).


Don't forget drugs and sexually transmitted diseases.

Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5430166 05/15/20 07:18 PM
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eljefino Online Content
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Accidental death is statistically unlikely to pay out, so a bad value for you, a good one for them, and why they keep marketing to you and your emotions.

"How awful would it be if you were healthy one morning then got killed in a car wreck?"

Boost ALL your life insurance with the money if you want more coverage.

Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5430238 05/15/20 08:46 PM
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If you invest $50 a month or $100 a month for 30 years, if you started in February 30 years ago to last February, you'd either have 85k after 30 years or 170k. Of course 100 invested 30 years ago from April til last April is down to 142k due to the market correction.

https://dqydj.com/sp-500-periodic-reinvestment-calculator-dividends/

Re: Accidental death insurance on a term insurance policy [Re: mk378] #5430384 05/16/20 05:10 AM
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Originally Posted by mk378
Ordinary life insurance covers almost all causes of death except suicide. Common other exceptions are skydiving or flying your own plane.


Just being pedantic, but plenty of LI policies cover suicide, but not during the first two years.


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Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5430390 05/16/20 05:43 AM
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MoneyJohn Offline OP
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Thank you, everyone.

I got the longest policy I could get, 30 years term. I would have loved to get more coverage but the cost is just too much. Agreed I have IBD (in remission in for almost a decade) but the colon cancer incidents are not as high as they used to be in IBDers, due to the newer drugs but it seems, they keep using the statistics that favor them.

Roth IRA suggestion is good but so far we have not been able to max out IRAs. I hope we will be able to do that someday.

We had disability insurance for my wife but the cost was pretty much the same as the cost of her term policy so we removed it after a couple of years. I don't want to jinx it but she is pretty healthy. I may review everything again after we clock 50.

Long term care policy is what I have not look at yet. Thanks for the pointer.

Re: Accidental death insurance on a term insurance policy [Re: MoneyJohn] #5430816 05/16/20 05:13 PM
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ecotourist Offline
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Originally Posted by MoneyJohn
I got the longest policy I could get, 30 years term. I would have loved to get more coverage but the cost is just too much.

We had disability insurance for my wife but the cost was pretty much the same as the cost of her term policy so we removed it after a couple of years.

Important to think about what insurance is for. In my opinion insurance is to cover those risks you can't cover yourself.

If you died, your family might be impoverished. If you became disabled (say by a bad stroke) your family might be impoverished. If yes to either question, you need insurance.

Would it matter as much if your wife became disabled. It might matter (disability is never nice) but would your family become impoverished? I don't know the answer, I'm suggesting you consider the question.

You buy insurance to fill the big gaps. That usually means death or disability of the primary breadwinner(s) whomever they are. In my opinion, children don't need life insurance (who are they supporting?)

When I started med school a colleague wanted me to buy life insurance with incorporated savings. That would have been a good deal for him (but not for me). I bought term life insurance to support my family in case I died. And I've been cancelling that insurance policy now as I no longer need life insurance. My family would be just fine if I died (at least from a financial point of view).

I have a number of physician friends and colleagues who become disabled (MS, brain tumour, heart attack, major fatigue due to an unremitting cancer, stroke). Some of their families suffered a good deal. I suspect they either had no disability insurance, or not enough. I consider disability insurance to be just as important as life insurance.


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