Accidental Cover in Term Insurance - Benefits & How It Works

Written by : Knowledge Centre Team

2025-10-11

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5 minutes read

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Key Takeaways

Accidental death cover offers an additional payout to nominees if the insured dies in an accident during the policy term.
Some exclusions apply, such as death under the influence of alcohol, illegal activities, or non-disclosure of health conditions.
Two major types of covers include Accidental Death Benefit (ADB) and Accidental Total & Permanent Disability Benefit (ATPD).
Riders like ATPD Premium Protection ensure future premiums are waived and additional support is provided in case of disability.
Choosing a term plan with customizable riders, like iSelect Smart360 by Canara HSBC Life Insurance, enhances your family’s financial safety net.a small coverage and upgrade it later without overpaying.

Life often comes with a lot of uncertainties. Hoping for the best is good, but what’s wise? To be prepared for unforeseen events. Term insurance with accidental death coverage ensures that the insured’s loved ones are financially secure if an accident leads to their untimely passing. Accidental death cover helps pay the family members the decided sum if they pass away in an accident during the insurance term.

However, such insurance has limitations as well. For example, if the person in question died of causes other than natural death, like while driving, they were under the influence of alcohol, or if it was a hit and run chase, then the person’s claim to the plan will be revoked.

So what are the nuances of the plan? Let us dive in detail.

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Exclusions In Accidental Death Cover

While term insurance covers all forms of accidental death, there are specific details in which the insured’s claim might be rejected. There are specific exclusions in this policy as well, for instance:

Driving Under the Influence: If a person is found driving under the influence of alcohol or any other substance during the said accident, their family loses their claim over the insurance.
Participation in Illegal Activities: Deaths that have occurred due to the insured being involved in some illegal activity, the family loses the claim in that regard as well.
Reckless or Hazardous Behaviour: The claim might get denied if the insured took part in some reckless activity, such as reckless driving, and others.
Self-Inflicted Injuries and Suicide: Self-inflicted injuries or suicide are not counted in this policy.
Non-Disclosure of Pre-Existing Conditions: If the insured doesn’t reveal if they had any ailments during the policy itself, the company reserves the right to reject the claim.
Death due to Pregnancy or Childbirth: In case of unfortunate demise of insured during childbirth, the company reserves the right to reject the claim.
Exposure to Nuclear, Biological, or Chemical Radiation: If the insured passes away due to exposure to any kind of nuclear, chemical or biological radiation, the company might deny the claim.

Did You Know?

Many term policies are also “convertible,” as they can be converted into a permanent life insurance policy.

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What are the Different Types of Accidental Cover in a Term Insurance Plan?

A term insurance plan generally includes complete accidental coverage choices to improve financial security for the insured and their families. There are two primary forms of accidental death coverage available:

Accidental Death Benefit (ADB):

If the insured, in case of any unforeseen incident, like a car crash, passes away, then the company is liable to cover the dependents. In addition to the base sum assured, the policy also offers an extra lump sum payment to the nominee in the event of accidental death.

For instance, the iSelect Smart360 Term Plan by Canara HSBC Life Insurance offers this benefit, where, upon accidental death, the nominee receives both the standard death benefit and the additional ADB sum assured, leading to a higher total payout.

Accidental Total & Permanent Disability Benefit (ATPD):

In the instance where the insured faces an accident and receives a permanent disability as a result of it, the company will be liable to waive off all future premiums payable. The iSelect Smart360 Term Plan by Canara HSBC Life Insurance provides two options under this benefit:

ATPD Premium Protection: All future premiums are waived, and the policy remains active with all other coverages intact for the remaining term.
ATPD Premium Protection Plus: A lump sum benefit equal to the ATPD sum assured is paid immediately upon disability, and all future premiums are waived, ensuring the policy continues with its existing coverages.

These riders are meant to offer complete financial protection, thereby assuring that the policyholder or their family has enough help to control financial responsibilities in case accidental death or incapacity arise.

Conclusion

Accidental death cover in term insurance is a crucial add-on for your insurance policy. Not only does it provide security to your dependents in case of an unfortunate departure, but it also makes sure you’re financially secure in case you’re faced with an unfortunate disability due to an accident. But you have to be aware of all the exclusions. Death under the influence or due to illegal activities will not be covered under the policy.

When selecting a policy, it’s important to consider options that offer customizable riders to suit your financial needs. For instance, the iSelect Smart360 Term Plan by Canara HSBC Life Insurance includes add-on benefits that can strengthen your overall coverage and provide more comprehensive support in case of accidental death or disability.

Glossary

Sum Assured: The guaranteed amount paid to the nominee in case of the policyholder’s demise.
Rider: An additional benefit that enhances a term insurance plan, like critical illness coverage.
Term Insurance: Term insurance is a type of life insurance that offers financial protection for a set period.
Mutual fund: A mutual fund is a pool of money that is invested in stocks, bonds, and other securities.
Financial Dependents: Family members who rely on the policyholder’s income for their financial well-being.

FAQs

Yes, the iSelect Smart360 Term Plan created by Canara HSBC Life Insurance covers accidental death.

Deaths such as driving under the influence, death due to illegal activities, and death caused by ailments not previously revealed are some types of deaths not covered in term insurance.

While accidental insurance especially covers death, injuries, or disabilities coming from accidents, term insurance covers death from any cause and provides financial protection.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.