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Accidental death and dismemberment insurance (AD&D)

By Posted : November 27, 2018

Accidental death and dismemberment Insurance (AD&D) can provide benefits, but is it worth it?

Many companies offer AD&D insurance to employees for free. In that case, it makes perfect sense for you. However, whether you want to pay the  additional cost for limited protections depends on your situation. 

You may want to consider also evaluating how AD&D compares to other types of life insurance, such as term life insurance and permanent life insurance.

About Accidental Death and Dismemberment Insurance

AD&D insurance pays you or your beneficiaries a set amount of money if your death or dismemberment is the direct result of an accident. AD&D is a limited form of insurance that covers you only in accidents. However, there are coverage restrictions that make accidental death and dismemberment insurance far less useful.

An accidental death policy or rider (minus dismemberment coverage) is a similar policy. If, for example, you had a $100,000 life insurance policy and you added an accidental death rider, and you were killed in a covered accident, your beneficiaries would get a total of $200,000 from your life insurance and the rider. The fact that it can pay twice as much as normal is why it's sometimes called "double indemnity."

You shouldn't consider AD&D insurance as a replacement for life insurance. AD&D coverage is limited to accidents, so it doesn't provide the kind of coverage you find in life insurance. AD&D is also not a replacement for disability. 

What Does AD&D Insurance Cover?

AD&D insurance covers exactly what its name states: accidental death and dismemberment. What does this mean?

In the event of a fatal accident or an accident that results in you losing your eyesight, speech, hearing, or a limb, AD&D will pay you or your beneficiaries a specified amount. However, there are restrictions and exclusions. To receive benefits related to an accident, your injuries or death usually must occur within a few months of the accident date. Also, you will only collect benefits if your death or injuries are proven, direct results of the accident.

Dismemberment coverage works on a "per-member" basis. If you lose one member (a hand, foot, limb, sight in one eye, speech or hearing), the insurance company will usually pay 50 percent of the full benefit. If you lose two members, you will receive the whole benefit. Coverage amounts for partial or complete paralysis vary, but are usually 25 or 50 percent.

Optional coverages sometimes include hospital stay coverage after an accident, and spouse and children coverage.

What Does AD&D Insurance Not Cover?

Typical exclusions of AD&D coverage include:

  • Death during surgery
  • Death resulting from a mental or physical illness
  • Bacterial infection
  • Hernia
  • Drug overdose
  • Skydiving
  • Car racing
  • Drunk driving
  • War

Make sure to read the fine print when applying for AD&D coverage. 

Where to Buy AD&D Insurance

You can generally purchase accidental death and dismemberment insurance as a separate policy or as a rider (endorsement) on a basic life, health or other insurance policy. AD&D policies are typically issued by major insurers and can also be purchased through credit card offers or credit unions. Some life or health insurance companies may include or offer AD&D in their group insurance plans.

Is Accident Protection Worth It?

Depending on the amount of coverage purchased and the benefits it provides, AD&D insurance premiums can cost as little as $60 per year. The low cost of accidental death and dismemberment insurance also means it doesn't provide much benefit. In fact, it usually only provides a small amount of peace of mind. It's generally more cost-effective to put the money you'd be paying toward the premium into a standard life or other insurance policy instead.

Will It Really Help?

If it's very likely that you'll die or become dismembered as the direct result of an accident, an AD&D policy may be a good idea, although you may have a higher premium if you're at high-risk because of your occupation or activities. Having additional coverage doesn't hurt, but realize that an accidental death and dismemberment policy is extremely specific and thus unlikely to pay a benefit. If you already have a life insurance policy, purchasing a larger benefit amount might not cost much more, and it will cover more circumstances with fewer exclusions.

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  1. Julia

    My mom was living a totally independent life, driving, volunteering, etc. until she fell 4 months ago and had a severe brain bleed causing a traumatic brain injury (TBI). Now she can no longer use her legs, has no short term memory and is very confused. All of these are known side effects of a TBI. While she did not lose her leg/legs, she no longer has use of them. Would this be covered under her AD&D policy?

  2. bill

    Does anybody know where to get AD&D without Life Insurance?

  3. Hadley

    Before buying accidental death insurance you should consider what it covers and what is not covered by the policy. Also, review any exclusions that may apply. Natural causes is not covered under an accidental death policy. And, most plans require that the insured die within a certain period of time of the related accident, for instance, within 3 or 6 months of the accident causing death. So, quote possibly, not all accidents are covered.

  4. Nurul Islam Chowdhury

    You are right

  5. Mickey Ray

    I've been having quarterly payments taken directly from my checking account at my bank. I too, have never received any paperwork or policy from this company. I found out my policy comes from Affinian Benefits Group, supposedly, a 3rd party of Hartford Insurance...so said "Omar", when I called the number my bank gave me to reach them. He also said they would send me a copy of my policy from their office in Texas and it would take 10 to 15 business days for it to get to me. After talking with this representative, and reading the information on your website, I now realize this policy is worthless and will cancel it.