insurance

Is accidental death insurance worth keeping?

Jack HungelmannDear Insurance Adviser,
I am in the process of filing for Chapter 7 bankruptcy in Virginia. Through an unsecured credit card, I received a one-year accidental death and dismemberment insurance policy, with the option of obtaining additional coverage. I opted for additional coverage, to include protection for my husband and daughter.

My question is: Should I keep the credit card, to maintain the policy, or are these policies not really worth holding on to? In a recent column, you advised a cancer patient to continue a whole life policy even though it had become very expensive. So, should I try to continue my accidental death and dismemberment policy as well?
-- Janice

Dear Janice,
To start with, I'm not a big fan of accidental death insurance -- or any type of insurance that pays off only under certain circumstances. I'm even less of a fan of insurance that comes with credit cards.

The fact is that most people die of natural causes. Buying accidental death insurance is a little like playing red 37 at roulette tables. It's nothing more than gambling.

As for the optional insurance that's marketed by credit card issuers, it's almost always overpriced compared to policies you'd buy in the insurance marketplace.

Accidental death insurance is a good idea if you are unable to qualify for life insurance, due to medical reasons. At least part of your death risk would be covered.

So save your money. Get rid of the credit card and its limited, accident-only life insurance. Later on, when you can afford it, buy some term life insurance on both yourself and your husband.

Good luck rebuilding your life!

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