Accidental Death and Dismemberment Insurance, or AD&D Insurance provides insurance coverage in the event of an accidental death or dismemberment. AD&D is an affordable add-on and is often sold as a rider on term and whole life insurance policies. You may also find AD&D is available as a part of your workplace health insurance program – either as an option or a fully funded inclusion – often depending on the type of work you do.
The accidental death insurance ensures your beneficiary receives a benefit if you die as a result of an accident. Accident specifications differ from carrier to carrier, but in most cases you must die as a direct result of an accident, and within three months of the accident.
Surgery, infections, mental or physical illness, drug overdoses and death as a result of a high-risk activity do not constitute an accident. Even if your death is the result of malpractice by the surgeon, it does not qualify under the accidental death insurance policy.
The dismemberment portion of this insurance plan refers to varying benefit payments that may be paid to you if you become dismembered, such as losing a limb, eyesight or speech. Loss of more than one limb (or eye) increases the payout of the benefit.
If you elect to include dismemberment insurance, it is important to clearly define “dismemberment.” Most payments are scheduled on a per-member basis, meaning you should have a clear understanding of whether the loss of a finger constitutes dismemberment, or if loss of your entire hand is necessary.
AD&D may be offered as a choice of just accidental death insurance, or both accidental death and dismemberment. Regardless, payouts for qualifying cases tend to be substantial, considering the consequences of the event are so severe.
Most of the conditions covered by AD&D insurance are also covered by most standard health or life insurance policies. However, it is important to inquire when obtaining life insurance quotes. Including AD&D as additional protection may increase the payout if you suffer from a qualifying injury, but it is not an effective substitute for full health or life insurance.