What Is Accidental Death and Dismemberment (AD&D) Insurance?

Accidental death and dismemberment (AD&D) insurance is a type of life insurance policy that pays out if the insured should pass away or become dismembered, such as losing an eye or limb, due to an accident. These policies can be sold as individual standalone policies or as an add-on, also known as a rider, to another policy.

Bringing Your Loved Ones Comfort in Hard Times

Unintentional death was the fourth leading cause of death in 2021, with 219,487 Americans suffering this fatality. For this reason, purchasing an AD&D policy may be a wise decision to help offset financial obligations should you pass away from an accident.

In the event something unfortunate happens, life insurance is designed to provide your loved ones with financial security by paying a death benefit — a monetary lump sum — to them upon your passing. An AD&D policy will add to their comfort by knowing should you pass away in the event of an accident, the death benefit will increase. Furthermore, should you become dismembered and unable to work, the AD&D policy will pay out and help offset lost wages.

How Does AD&D Insurance Work?

AD&D insurance works by paying out a set amount should you pass away from an accident or become dismembered. The terms and specifications of the policy vary from company to company. However, each company should clearly state in their policy what qualifies as an accident and dismemberment, what benefits will be paid out, and to whom.

Eligibility

Most people who apply for an AD&D policy will qualify because the policy is only covering accidents. So, should they pass away from a chronic illness or some other non-accident situation, there would be no coverage. However, those that are currently disabled or suffer from dismemberment may not qualify. You may also not qualify for some AD&D policies if you have a high-risk job or lifestyle or you are currently unemployed.

Coverage

While policies will differ from company to company, some accidents are covered by most AD&D policies, including the following:

Vehicle Accidents: Vehicular accidents are among the leading causes of accidental deaths. People who travel a lot may consider adding an AD&D policy as added protection.
Pedestrian Accidents: If you live in an area where walking near a crowded roadway is common, you may benefit by adding an AD&D policy to cover you if you are hit by a motor vehicle.
Slip and Fall Accidents: Slip and fall accidents refers to accidents such as slipping on ice or a wet floor and are generally covered by AD&D policies.
Workplace Accidents: Because injuries on the job can be common, an AD&D policy may be a great option to help offset that risk; however, not all high-risk jobs may be covered.
Public Transport Accidents: If you live in an area where public transportation is common, such as buses or taxis, you may benefit from an AD&D policy.
Accidental Drowning: Accidental drownings are covered by AD&D policies and may be a good idea to carry should you be an active swimmer or frequent the water.
Exposure to Elements: Exposure to elements refers to exposure to weather conditions, such as rain, wind, or harsh temperatures, and are generally covered.
Accidental Poisoning: Accidental poisoning account for more than 100,000 deaths a year. Accidental poisoning can refer to exposure to toxins at work or an accidental drug overdose.
Accidental Choking: Most AD&D policies will cover choking caused by food or objects.
Injuries from Natural Disasters: A natural disaster may include a flood or tornado. Dismemberments or deaths caused by these types of disasters are covered by most AD&D policies.

While most of these accidents and situations are covered on an AD&D policy, it is important to remember that all policies will vary. Check your individual policy to ensure what is covered.

What’s Not Covered?

While many accidents are covered by AD&D insurance, most policies do not pay for the following:

Death caused by illness
Suicide or self-inflicted injuries
Intentional drug overdose
Death or injury while driving under the influence
Death or injury while committing a crime
Death or injury while participating in a riot or war
Death or injury from pre-specified “dangerous” occupations or hobbies (i.e., scuba diving, sky diving, car racing, playing professional sports, flying airplanes, etc.)

How Much Does AD&D Insurance Cost?

Most AD&D policies will range from $5 a month as an add-on policy to $30 per month as a standalone policy. Insurance companies usually offer AD&D policies at a much lower cost than a traditional life or disability policy. This low cost is because the AD&D policy will only pay out in the event of an accident. In contrast, a conventional life or disability policy will cover the event of an accident or illness. You can also cut costs by adding an AD&D policy as a rider to your current life insurance policy.

Should You Get AD&D Insurance?

The ideal candidates for AD&D insurance are young people who are more at risk of being in an accident, older people or people with underlying health conditions who don’t qualify for traditional life insurance, and people who have risky jobs.

If you fall into any of the above groups, AD&D might be a good path for you as it gives you an affordable life insurance option when others might not be available and when you have a risk of an accident. These are two great reasons to purchase this type of policy. An even better reason is if your employer offers it as a free workplace benefit. In this case, there’s no harm in signing up.

Advantages

The following are some of the advantages of AD&D insurance that make it attractive as a standalone or as an add-on to traditional life insurance:

Typically, there is no medical exam. This can be helpful if you have pre-existing health conditions and can’t get traditional life insurance.
Guaranteed coverage if you fall within the pre-specified age parameters. For some companies, the age parameters are 18 to 70 years old, while other companies will cover from 18 to 80 years old.
Quick coverage is possible. Many policies will have no medical exam, no lengthy questionnaires, and no waiting period.
It provides an additional death benefit for beneficiaries. Adding an AD&D policy to an existing life insurance policy can increase the payout to your beneficiaries. This is something you might want for peace of mind.
It’s less expensive than traditional life insurance. While adding AD&D to a traditional policy can be appealing, you might want to skip the life insurance and go right to AD&D because it’s less expensive. These policies are less expensive because they’re less likely to pay out.
It pays out for serious injuries. Unlike standard life insurance that pays out only upon death, AD&D also provides benefits for severe injuries. This can help cover medical expenses, rehabilitation costs, loss of income, and lifestyle adaptations necessary after a serious accident.

Disadvantages

AD&D doesn’t offer complete protection and has some disadvantages, especially as a standalone policy.

Coverage is limited to accidents. While accidents are possible and certainly a concern, more people die of illness each year than accidents. Traditional life insurance pays even if the policyholder dies from illness or natural causes, so there’s a much higher chance of a payout.
Coverage might be tied to your employer. If you leave your job, you lose this coverage.
Some “high-risk jobs or hobbies won’t be covered. Activities such as car racing, scuba diving, and more are usually not covered by AD&D.
It may be impractical for some people. If your job is dangerous or you’re on the road a lot, you might find AD&D practical because the odds of an accident are higher. If this isn’t the case, the chances of using this policy are lower than a traditional life or disability policy. If you do not use the policy, all of the money you pay towards it is lost.
You must show proof of accident. The burden of proof falls on the claimant to show that the death or injury was accidental. This might require detailed medical records or potentially an autopsy in the case of a death.

How To Get Accidental Death and Dismemberment Insurance

If you think an AD&D policy is right for you, taking the proper steps to acquire the insurance is necessary. First, if you can add an AD&D rider to your life policy, that may be the easiest and most budget-friendly option. You would need to contact your insurance policy provider to inquire and purchase the rider. You also may be able to purchase an AD&D policy from your employer at an affordable rate.

Suppose you are not able to add the AD&D rider to an existing policy or purchase through your employer. In that case, you will need to look into purchasing a standalone policy through a private company. If this is the case, you will need to follow these steps:

Assess Your Needs. Evaluate your insurance needs. Think about your lifestyle, job, family situation, and financial condition.
Research Policy Options. Research different insurance companies and the policies they offer. Look at insurer ratings and read member reviews.
Compare Quotes. Get multiple quotes and compare what they offer. Look at the accidents the policy covers, the death benefit, and the premium.
Purchase a Policy. Once you make a decision, it’s important to review the policy and look over the details with a trusted expert to ensure you fully understand it. You’ll designate your beneficiaries as you set up the policy.
Regularly Review Your Policy. It’s essential to periodically review your policy and ensure it’s still offering the coverage you need. As life changes occur, be sure to update your policy as needed.

AD&D Insurance vs. Traditional Life Insurance

While AD&D does have a life insurance element, it’s not the same as traditional life insurance. The accident portion of AD&D is the biggest differentiator because it’s required for an AD&D to make payments. In comparison, a traditional life insurance policy will offer coverage for most kinds of deaths.

One thing that can make an AD&D policy attractive is that there may be guaranteed approval if you are within the predetermined age parameters. This means that people who can’t get a traditional life insurance policy can at least get an AD&D policy, and they have the peace of mind that comes with knowing that if there’s an accident, their beneficiaries are protected.

Additionally, traditional life insurance does not have a dismemberment clause, but you can add a disability or even an AD&D rider to many life insurance policies if this is something you’re concerned about. These two policy types work well together in many situations by offering a broader range of coverage and protection for beneficiaries and the policyholder.

Tips for Maximizing Your AD&D Benefits

An AD&D policy can be an excellent option for some people, and getting the most out of the policy is essential. Knowing the ins and outs of the policy, such as the following, will help you maximize your benefits:

Consider Your Lifestyle and Occupation: If you have a high-risk job or hobbies, an AD&D policy may help comfort you knowing that you or your loved ones will receive a payout if you pass away or become dismembered due to your job or lifestyle. However, AD&D policies may not cover some high-risk jobs and hobbies.
Combine with Life Insurance: Adding your AD&D policy as a rider to your life insurance policy will not only help keep costs low, it will as allow for simplicity because you have one policy instead of two.
Ensure Sufficient Coverage: Purchasing an AD&D policy adds more coverage to your life insurance policy should you pass away due to a covered accident. Furthermore, you also ensure wage replacement should you become unemployed due to a covered dismemberment.
Regularly Review Your Policy: An AD&D policy may change overtime like most insurance policies. Most insurance providers will send you an annual statement and a copy of your policy. It is essential to review the policy carefully.
Choose Beneficiaries Wisely: Your beneficiary will be the person or persons who receive the death benefit payout should you pass away. It is important that you choose a beneficiary that will handle the proceeds responsibly.
Maintain a Safe Lifestyle: While AD&D policies may cover some high-risk hobbies, some hobbies, such as skydiving, may not be covered. By maintaining a safe lifestyle, you will ensure your eligibility for AD&D coverage and that your accident is covered should you have one.

Putting It All Together

An AD&D policy may be a good fit for you if you are concerned you may pass away or become dismembered due to an accident. Since the policies are usually very affordable, some insureds may opt into one regardless of their circumstances. However, if you are an older individual who rarely travels with few financial obligations, an AD&D policy may be optional. Examining your needs and lifestyle is important to conclude if an AD&D policy is right for you.

Frequently Asked Questions

Generally no. Extreme sports, such as skydiving, scuba diving and professional fighting, are usually not covered under an AD&D policy.

It depends on the policy. On some policies, you will be covered continuously. However, some may require that you are working or under a certain age, usually 65, to maintain an AD&D policy.

Generally no. Most AD&D policies do not cover you while you are traveling abroad. However, if you purchase travel insurance, you may be able to add an AD&D rider to cover you overseas.

AD&D Insurance Explained: Understanding Coverage and Benefits