Accidental death and dismemberment insurance
Accidental death and dismemberment insurance – more commonly known as AD&D insurance – covers you in the case of a fatal accident or a disabling accident, such as when you lose a limb or your eyesight.
But this type of insurance has restrictions and exclusions that prevent it from being worthwhile, Worters says. For example, to receive an AD&D benefit, your losses generally must occur within a few months of the date of an accident, Worters says.
"Also, you will only collect benefits if your death or injuries are proven direct results of the accident," she says.
It's also important to check the fine print on these policies. For example, typically you would be paid the full coverage amount for losing both limbs, but only half the amount if you lose one limb.
"Sometimes, you are better off with a life insurance policy and adding an accidental death policy or rider to it," says Worters.
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