Accidental Death Life Insurance

Compare with Savvy to help you find accidental death life insurance options today.

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

Thousands of people pass away every year in Australia due to fatal accidents, leaving behind loved ones who face the task of navigating a financial future without them. If you want to give some peace of mind to your family, comparing with Savvy can help you find a life insurance policy that covers accidental deaths and more.

When you compare with Savvy, you’ll get to consider life insurance policies from a panel of some of Australia’s leading insurers. You can get real-time price estimates on a range of policies and compare their features to find one that may be suitable for your needs. So, get a quote and start comparing with Savvy today.

What is accidental death insurance and how does it work?

Accidental death insurance may pay your nominated beneficiaries a lump sum if your death is ruled an accident. This type of policy is similar to standard life insurance, except the payout is contingent on the death being caused by something sudden and out of your control, rather than falling critically ill or dying of old age.

Under these types of insurance policies, you agree to pay a premium (based on several factors, including your age and lifestyle choices) in exchange for a lump sum payout if you suffer an accidental death. The payout goes to a nominated recipient. Most policyholders choose their spouse or child to receive their payout if they die. Payouts are usually made within three months of a claim being filed after the accident claims a policyholder's life. In most cases, you won’t have to undertake a medical test during the underwriting process of the application.

Insurers will generally offer up to $500,000 worth of coverage under their accidental death policies and, in some cases, allow you to be covered until you reach the age of 99.

What’s included and excluded under accidental death insurance?

In most cases, insurers define accidental death and dismemberment as a physical injury stemming from a sudden and unintentionally violent external means. Therefore, your unintentional death can’t be connected to your pre-existing medical conditions, whether physical or mental. Most insurance companies will specify what they mean by accidental death in their PDS, so it’s essential to read it thoroughly given the exact definition does tend to change from insurer to insurer.

Some accidental death and dismemberment insurance policies may include an option to increase coverage for your children. In addition, other plans provide around-the-clock global coverage which is useful for international travellers or business people.

Insurers will also have a list of general exclusions and areas where you won’t be covered should your loved ones need to file a claim. Some of these may include:

  • Pre-existing conditions
  • Cancer
  • Suicide
  • Heart attacks or heart conditions
  • Intentional or deliberate accidents
  • Infectious diseases
  • Taking part in high-risk sports such as scuba diving or car racing
  • Alcohol or drugs
  • Accidents caused by breaking the law
  • Flying to a country against Australian travel advice
  • Playing professional sports

It’s important to provide your insurer with all the information they need to get a crystal-clear idea of your needs. Failing to declare certain pre-existing conditions or lifestyle choices (such as being a regular smoker) could see your policy voided if you decide to make a claim.

In addition, your claim may not be payable if you die some time after the accident occurs, so it’ll pay to check out the fine print on your policy.

What’s the difference between life insurance and accidental death insurance?

Life insurance and accidental death policies may seem similar at first glance, but they’re very different types of policies. Some of the ways these two options differ include:

Accidental death Life insurance
Accidental death insurance pays out a lump sum to your dependents only if you pass away due to an accident that meets the insurer's criteria. For this reason, this type of insurance often has cheaper premium rates because it provides less protection.
Policy premiums for life insurance tend to be higher than those for accidental death insurance. This is because life insurance policies may pay out benefits in the event of death from a much wider range of causes, including via an accident and a range of other injuries and ailments, as well as for terminal illnesses.
The accidental death benefit is payable only for accidental deaths which occur within 90 days of the accident.
You have about 60 days to file a claim after the incident occurs. Death benefits are paid out for all reasons for death, including old age, cancer, and most other forms of the disease. However, suicide during the first 13 months generally isn’t covered.
In most cases, either minimal or no medical underwriting is necessary.
Life insurers will usually follow the usual underwriting process of evaluating an individual's risk to an insurer by considering their health and lifestyle choices.
Usually a speedy application process.
The application process for life insurance tends to be a little more involved, depending on whether you go through a broker or buy directly, but can still be quick and convenient.
The lump sum payout for the Accidental Death Benefit is typically made quickly.
A portion of your life insurance benefit may be paid out immediately to help with last expenditures; however, the rest of your money will take time to process.
The maximum amount of coverage is usually about $500,000.
You’re able to take out coverage between $100,000 and $2 million.

Life insurance is universally seen as a far superior product if you’re looking for peace of mind for you and your loved ones, as it covers you for a range of other events beyond just accidents. If you’re in the market for a policy, you can compare with Savvy to help you find a deal that best suits your circumstances. Get a quote through us today.

Types of life insurance

Why compare life insurance through Savvy?

Pros and cons of accidental death insurance

PROS

Cheaper coverage

Accidental death policies tend to be much cheaper than standard life insurance policies because you’re only able to claim for one cause of death (though there are still plenty of cheap life insurance policies available).

Quicker to apply

You generally don’t need to jump through some of the hoops you need to get life insurance, such as medical examinations.

Payouts made faster

Typically, your beneficiaries should have your payout within a few weeks, as they’ll only have to provide your death certificate.

CONS

Less cover 

Taking out an accidental death policy will provide you with less coverage and leave your family without protection if you are diagnosed with a critical illness or pass away due to a terminal condition.

Lower claim limits

Accidental death policies only allow you to claim up to $500,000, while life insurance policies will cover you up to $2 million, meaning it could be more likely your family or beneficiaries are left without adequate financial cover.

Fewer policies on the market

Accidental death policies, otherwise called AD&D in the US, are harder to find on the Australian insurance market because of their lack of coverage.

Frequently asked questions about accidental death life insurance

How do I apply for this type of life insurance?

You can apply for accidental death life insurance directly through an insurer or deal with a broker, whatever suits you. The application process will usually involve you filling out an online application form and providing some personal information to your insurance company. However, if you purchase your life insurance through Savvy, the process is just as simple and straightforward, with insurance experts helping you through the process of completing your paperwork.

How do I cancel my accidental death insurance policy?

If you have accidental death insurance and decide to switch to a life insurance policy, you’ll need to contact your insurance provider directly and tell them you want to cancel your policy. They should send you a cancellation request form which you’ll need to complete. Once you’ve submitted this form, your policy will be cancelled. It pays to keep in mind this only applies if the policy is purchased for longer than your cooling-off period.

Is it worth getting this type of insurance as a senior?

While you may think it’s a good idea to take out cover for accidental death if you’re a senior, the chances are you’re more likely to need a life insurance policy that covers you for age-related issues such as pre-existing conditions, as well as terminal and critical illnesses. Paying a bit extra for cover can be worth the security it gives you and your family that you’ll be covered.

Are there any tax benefits with accidental death insurance?

No – you won’t be able to claim tax breaks on your policy when filing your tax return. However, some types of life insurance purchased within your superannuation fund are tax-deductible, such as TPD insurance and income protection insurance (which is also tax-deductible outside of your insurance).

What’s the difference between stepped and level premiums?

Stepped and level premiums have some key differences which can affect how much you pay for your coverage. Level premiums remain the same for the life of the policy and can eliminate a major source of anxiety for policyholders: price increases. In contrast, stepped premiums may be preferable in the short term because they’ll start low, but will increase over time as you get older.

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.