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Will Life Insurance Pay If There Is a Car Accident Resulting in Death?

August 5, 2019

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When you purchase a life insurance policy, you do so to protect financially against death. The policy pays out to designated beneficiaries if the insured person dies, regardless of your age or cause of death. This provides some peace of mind for you and those you designate; whether you die of natural causes or injuries in a car accident, the policy pays the same. But the certainty also limits your recovery to a defined amount that may not cover all your losses. You still need an experienced attorney to help make you whole after an accident.

How Life Insurance Works

Life insurance generally comes as either term, whole, or accidental death and dismemberment coverage. Whichever policy is in place, whoever is designated in the policy receives payment after the policyholder dies. If you are named in a policy, and the policy is in effect, you will receive payment of the amount covered. In the case of a car accident, you gain the benefit of a payment that comes typically within 1-2 weeks.

Contract-Based Payment

In some ways, the certainty of your life insurance payment works against you. The policy terms determine how much the policy will pay, and have little to do with the losses you suffer. The contract sets the amount for which the insured is covered, so a car accident that takes away years of expected income or creates other financial burdens will not change the amount of the payment. And if premium payments on the policy lapse between the accident and when the insured dies, you may lose out on benefits entirely.The terms of the contract, rather than the need you have after a loss, dictate how much you will receive.

A life insurance policy can help cover some losses and expenses, but it is not designed to make you whole in all circumstances. If you have lost someone you love in a car accident, contact Stern & Stern LLP today. We will help you understand your rights and recover what you deserve.