Accidental death and dismemberment insurance (AD&D) is often mistaken for life insurance. The two have similar benefits, but the purpose and target policyholders are quite different. 

Most AD&D policies are offered to employees by companies that want to provide additional coverage to families in the event of a tragedy. The CDC reported that accidents are one of the leading causes of death for adults, making AD&D coverage a major consideration for many. While this insurance is usually added as extra coverage on an existing policy, it is also available as a stand-alone policy, so it’ll benefit you to know more and see how it can help your family. 

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What is AD&D insurance

Accidental death and dismemberment is an insurance plan that covers you if you’re in an accident. Unlike most traditional life insurance policies, an AD&D plan will pay out even when the accident does not result in death. 

As mentioned previously, it is more common for AD&D insurance to be added to a policy in the form of a rider. A rider is an additional coverage that increases the benefits of your base policy. There are limitations, so it is essential to know what accidents are covered before you make a decision. AD&D does not replace life insurance but has benefits that can protect you financially if you or a loved one survives an accident. 

Accidental Death

AD&D, also referred to as double indemnity, provides financial security if you’re in a fatal accident or an accident resulting in severe injury. As a stand-alone policy, the benefits are not as permanent and secure as a term or whole life policy. If you’re paying for the policy and live a long and healthy life and die of old age, your beneficiaries will not receive a payout. 

Adding AD&D as a rider is more beneficial. The coverage amount of your life insurance policy is doubled if you have the AD&D rider. Under some circumstances, if your death or injury happens while on public transportation, the insurance company will pay double or triple the original death benefit amount. This increase is not guaranteed and often varies depending on who your insurance carrier is. You’ll want to carefully read your policy to see if it applies.  

Having a clear understanding of your policy is critical. You want to avoid paying into a policy that doesn’t provide the benefits you need. 

Before your final policy is signed and issued, make sure you compare life insurance rates and policies on Insurify, to ensure you’re getting the best deal possible. 

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Dismemberment

Traditional life insurance coverage is not focused on injuries caused by accidents. While these policies will likely pay out in the event of death by accident, if the policyholder survives the accident, life insurance alone won’t help financially. 

Although dismemberment coverage and disability insurance both supplement income, dismemberment is uniquely designed to pay a set amount if you or a family member has loss of sight, hearing, speech, or limb. Each insurer determines what a covered accident is, so make sure you choose your policy wisely. 

The amount of coverage you receive in an accident depends on the nature of the accident or the injuries the policyholder sustains. For example, the insurer will pay 100 percent of the benefit if the policyholder dies or loses multiple limbs but will only pay half if the policyholder loses one hand or foot.

Supplemental AD&D 

Supplemental AD&D is usually cheaper and offered by certain employers. It can be purchased both as a stand-alone policy and as an add-on to your term life insurance policy. The latter scenario is usually more common. 

It’s usually helpful to add supplemental AD&D to a term policy because term policies generally have fewer benefits than whole life policies do. By adding a supplemental AD&D rider, you can have more robust coverage with a term life policy. This coverage does not require a medical exam, and your insurer will supplement expenses from ambulance transportation, surgery, or emergency room visits.  

Supplemental AD&D is also available on health insurance policies. It picks up costs that your healthcare provider will not cover. That is important to know if you want to combine your health and life insurance plans with the same company. 

Eligibility

The eligibility requirements for getting AD&D insurance are simple. Since most AD&D policies are offered to employees by employers, there is no medical exam or health questions to consider.  

Circumstances Excluded from Coverage 

It’s important to pay close attention to what your AD&D insurance covers. The following circumstances are typically not covered by AD&D insurance:

  • Death from natural causes 
  • Terminal illness
  • Skydiving
  • Drug overdose
  • Drunk driving
  • Car racing
  • Death during surgery

Who needs AD&D?

AD&D insurance works best for people who work in a high-risk environment. People with high-risk jobs are more likely to be denied standard life insurance. Despite the limitations of AD&D insurance, it could be a reasonable purchase if you are not eligible for traditional life insurance policies like term life or whole life. You’ll always want to take any necessary actions to reduce the financial burden on your family in case you’re unable to provide for them.

This policy also works well on a temporary basis. Since AD&D has no contract and you are not obligated to the policy, people choose to have coverage when they know they’ll be more at risk. This is best when you are traveling for work, going on vacation, or studying abroad. You still want to be sure about which accidents are covered before you purchase.

The Society for Human Resource Management reported in 2019 that AD&D was one of the most common employee benefits, with 83 percent of employers offering this insurance. 

While you are exploring your options, you need to have a clear financial strategy and know what or how you want your policy to work for you in the long run. Keep in mind that the policy you choose is designed to be a long-term investment. 

If AD&D is offered as a free benefit through your employer, you should take advantage of the coverage. Of course, if you cannot afford a standard life insurance policy, AD&D is the next best option, especially with accidents being a leading cause of death for many adults. Some coverage is better than no coverage. 

You don’t need multiple policies, so it works more in your favor to have a life insurance policy with the AD&D rider. Your life and the lives of your family should always be protected. 

Compare other insurance products on Insurify to ensure you make the best decision possible.  

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AD&D vs. Life Insurance 

Both AD&D and life insurance are beneficial if your family falls on hard times. 

AD&D will be there for your family when you cannot, regardless of whether an accident resulted in your death or injury. Life insurance, on the other hand, will be there for your family only in the event of your death. Life insurance does not typically pay a policyholder if they have an illness or accident. Both types of coverage can be purchased without the other, although AD&D works best with a life insurance policy

When adding AD&D as a rider, there are more advantages to having it on a whole life policy than on term life. Whole life policies are permanent and hold significantly more value than term life policies. You’ll be securing your family financially while investing in lifelong coverage. As an add-on to a whole life policy, the AD&D rider is not based on a term and will never fall off of your policy or increase your premiums over time. 

Although whole life policies offer more long term security, many people may choose a term policy to save money. If you have a term life policy, it will have far more benefits with an AD&D rider. Unlike whole life, term life policies provide little to no benefits to the policyholder while they are alive. The AD&D rider changes that and covers you with benefits that sometimes aren’t included in a traditional whole life policy, and for a lower price.  

When deciding the best way to provide financial security to your family after you’re gone, traditional life insurance is the best option. Life insurance has more benefits and lasts a longer period of time. With a whole life policy, you’ll have the benefits of your base plan and AD&D rider for life. There are no term limits on AD&D, but the coverage does not protect you from all of life’s unexpected possibilities, such as terminal illness, suicide, sports accidents, and more. 

You can add AD&D to ensure your family has protection while you’re alive and to increase the death benefit for your base policy.   

Life Insurance Companies Offering AD&D

Most insurance companies offer AD&D coverage, and it is often lumped onto your traditional life policy and included in your insurance premiums. Here is a list of companies that offer AD&D and other products that can financially support your family during a difficult time. 

1. New York Life 

New York Life insurance offers AD&D coverage as a rider on both term and whole life insurance. This additional benefit doubles the amount of coverage if the insured loses their life in an accident. 

2. Aflac

Aflac has an accident protection policy that pays a cash benefit if an accident requires recovery time or an emergency room visit. The One Day Pay program allows you to receive funds within one day of your accident. Aflac is mostly known for offering policy supplements to help individuals fill in the gaps left by their primary life or health insurance companies. 

3. Prudential 

With Prudential, AD&D is available as a stand-alone policy or as a rider to your base policy. The coverage is offered as an employee benefit. You also have the option to purchase AD&D for your spouse or children. Prudential’s A+ rating with A.M. Best makes them one of the first choices when it comes to AD&D. 

4. AIG Direct 

AIG Direct offers AD&D as three separate plans. The AG AccidentCare Direct Plus plan is a guaranteed policy for dismemberment or paralysis and has guaranteed renewal benefits. The Accident Expense Plus plan helps your family where your health insurance does not. This plan helps most in the event of critical illness. AG Accident Choice Plus plan provides 24-hour protection and an indemnity benefit. These plans cover costs such as surgery, emergency room visits, and physical therapy. Coverage is available to residents in over 100 countries. 

5. MetLife 

AD&D is offered as an employee- or employer-paid benefit with MetLife. A wide range of covered accidents falls under its AD&D policy. Covered benefits consist of injury caused by felonious assault, hospitalization, therapy, job-related injury, and more. If you or a loved one is in a car accident, there is additional coverage for seat belts and airbags. 

How much does AD&D cost? 

Rates are usually low for AD&D coverage, but before you start shopping for a policy, check to see if your employer offers it. 

As one of the cheaper options available, premiums are based on the amount of coverage you have. Premiums can be as low as $4.50 a month for $100,000 of coverage. 

Make sure you compare life insurance quotes on Insurify before buying a policy—you might find a better deal for a better policy!

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How to Find the Best Life Insurance 

Buying life insurance is always a practical decision when it comes to safeguarding your family’s financial well-being. There’s peace of mind in knowing that you and your family are prepared if the unthinkable happens.  

Insurify makes it easy to find the best life insurance. In just a few minutes, you can compare real quotes from the best companies. 

If you’re already covered, it’s never too late to add more to your policy to maximize your benefits. If you’re getting a new policy for the first time, keep in mind that your policy can always be adjusted to fit your current situation. You can increase or reduce your coverage to work within your budget.  

Comparing what’s available will give you the best chance to find a great deal. Stay within your budget by paying premiums based on how much coverage you have. Periodically, you’ll be able to renew your policy and have a chance to make changes or leave it the way it is. 

Updated November 10, 2020

Brooke Taylor is a freelance writer with a passion for storytelling and educating others. She has experience in life insurance and has been active in helping consumers make more informed decisions. When she's not writing, Brooke is reading a good book or being a mom of four. To learn more about Brooke you can visit her website www.brookeuniverse.com.