Disadvantages of an Accident Insurance Policy
- Cause of death. Accident life insurance coverage only pays out if your death can be directly attributed to an accident. If you were to suffer a heart attack when driving, the policy won't pay out.
- High risk hobbies and activities. Some policies don't cover accidents that occur due to the participation in high risk activities, such as bungee jumping, hang gliding and rock climbing. Always check the terms and conditions if you intend to participate in these activities.
- Personal accountability. If you die in an accident when intoxicated, on drugs or breaking the law, your accidental death life insurance policy won't pay out.
- Time frame. Most policies specifically state that your death or dismemberment must occur within 3 months of the accident taking place.