What is AD&D insurance?
Accidental death and dismemberment (AD&D) insurance is a category of life insurance that only pays out a death benefit when the insured is in a covered accident that causes death or pays out for specific serious injuries such as paralysis, the loss of a limb, loss of eyesight, hearing, or the ability to speak. In the case of an accidental death, the beneficiary will receive the payout, and in the case of an injury, the policyholder will receive the payout.
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What does AD&D insurance cover?
AD&D insurance covers death and injuries resulting from accidents. The exact circumstances under which your AD&D coverage applies are specified in your policy, but you're generally covered for:
- Loss of limb
- Loss of sight, hearing, or speech
- Permanent paralysis
- Death resulting from an accident, such as a car crash
It's important to note that some insurers offer accidental death benefit insurance without dismemberment coverage so those policies only pay out if there is a death directly due to an accident. AD&D insurance covers both accidents and injuries.
What's not covered by AD&D insurance?
While AD&D insurance may cover accidental death and death resulting from murder, there are many causes of death and injury that may not be covered, including:
- Overdose
- Suicide
- Natural causes or illness
- Accidents occurring while under the influence of drugs or alcohol
- Injuries suffered while committing a crime, such as a robbery
- Recreational activities specified in the insurance policy
If you're in a particularly high-risk job such as firefighting, law enforcement or the military, you may not be able to qualify for AD&D coverage. Consider shopping around, as your eligibility could differ by insurer. Be sure to read the fine print and details of the coverage and any timeframes the insurer notes for covered events.
Example:When you participate in dangerous extracurriculars or work, you accept the risk involved. As a result, AD&D policies don't typically cover death or injury caused by high-risk activities, and standard life insurance policies may not cover high-risk activities either.
What's the difference between life insurance and AD&D insurance?
The basic purpose of life insurance, whether term or permanent, is to provide a death benefit for financial protection, such as protecting dependents if a family "breadwinner" dies unexpectedly and there is a loss of income. AD&D insurance only pays a death benefit when the insured is in a covered accident. Here are some distinctions:
| Feature | Life Insurance | AD&D Insurance |
|---|---|---|
| Cost | Life InsuranceStandard life insurance rates vary based on age, health, and lifestyle. Typically, premiums are lower for term life, higher for permanent life plans. | AD&D InsuranceMore affordable than standard life insurance rates. Rates depend on information you provide in an application and death benefit you select. |
| Coverage length | Life InsuranceDepends on the plan; term life lasts a set number of years while permanent is lifelong | AD&D InsuranceDepends on whether you have a standalone policy or an AD&D rider on another life policy |
| Cause of insured's death | Life InsuranceTypically covers most causes of death, including natural causes and illness | AD&D InsuranceCovered accidents and injuries specified in the policy |
| Covers insured's injuries | Life InsuranceNo | AD&D InsuranceFor covered accidents and injuries, such as dismemberment, as specified in the policy |
| What does it pay beneficiaries | Life InsuranceTypically pays a lump sum death benefit | AD&D InsuranceLump sum or partial payout |
| Builds a cash value | Life InsurancePermanent life insurance, such as whole life or universal life, builds cash value. Term life doesn't build cash value. | AD&D InsuranceNo. AD&D works differently than standard life insurance |
Do you need both life insurance and AD&D?
Standard life insurance with an all-cause death benefit covers you for most causes of death, but it won't cover you for non-fatal injuries. If you want coverage in case you're accidentally seriously injured, it may make sense to get an AD&D policy or rider in addition to your standard life insurance policy.
Is accidental death insurance worth it?
If you qualify, term life insurance pays out for more causes of death than AD&D insurance, and it may not cost significantly more. If you're concerned about accidents, adding an AD&D rider to a standard life insurance policy may make more sense than purchasing a standalone AD&D policy.
If you don't qualify for standard life insurance, AD&D coverage may still be better than no coverage. An AD&D policy may be easier to qualify for because it doesn't require a medical exam, and you can generally get an AD&D policy faster than a standard life policy.
How to get AD&D coverage or life insurance
Call 1-866-912-2477 to speak with a licensed Progressive Life by eFinancial representative. To further explore your life insurance options, quote a standard life insurance policy online.
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