What Kind of Life Insurance Policy Do You Have?

Life insurance is the most important insurance need I discuss with clients on a day to day basis. Many people who ask me to review a life policy they have had are surprised and then subsequently really angry to find out the limitations of that life policy. Why are they so angry? They were sold a bill of goods and as my fellow Southern friends say, they discovered “that dog don’t hunt”.


The most common culprit here is all those accidental life insurance policies being sold and allowed to be misunderstood as traditional life insurance policies. Do you think you have life insurance through your job? What if you purchased life insurance through a creditor like your mortgage company or credit card company?

If you purchase insurance, you will want to make sure you understand how your policy is worded when it comes to a covered death. Accidental Death life insurance covers you only in the case of accidents. Therefore, if you die in a car crash, you would be covered. If you die from cancer, you would not be covered. Typically, you are not covered if you should die in surgery or overdose on medication. The death benefits are very specific. For example, typically accidental death policies will not pay a benefit if an individual dies as the result of a heart attack while driving and crashes their car.

Traditional (or standard) life insurance is considerably broader. It covers every type of death – some even cover suicide. If you want your family to be covered no matter what happens, it's important to avoid relying solely on Accidental Death life policies to provide for your dependents in the event of your death.