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What Is AD&D Insurance?

Accidents, or unintentional injuries, are the fifth leading cause of death and the number one leading cause of death for ages 34 and younger, according to John Hopkins Medicine. In 2019 alone, there were 33,244 fatal car crashes in the U.S, according to the Insurance Institute for Highway Safety (IIHS). Given the frequency of accidental deaths, having an AD&D insurance policy that covers you and your family can be essential.

AD&D death benefits are similar to life insurance but much more limited in coverage. You may even receive a payout if you survive an accident but lose a limb. Keep reading to learn about coverages and if AD&D insurance is right for your lifestyle and needs.

What Is Accidental Death and Dismemberment Insurance?

Accidental death and dismemberment insurance (AD&D) provides coverage for death after a sudden accident, such as drowning or a vehicle collision. If you survive the accident, AD&D insurance also covers dismemberment — the loss of a limb — or function (e.g., hearing, sight, speech).

AD&D insurance can be purchased as a standalone policy but can also be an added benefit (rider) to your existing life insurance policy. Accidental death and dismemberment insurance policies do not generally require a medical exam, so they can be an option worth considering for people with underlying health conditions who cannot be approved for life insurance, although death from illness or natural causes will not be included.

What Does AD&D Insurance Cover?

AD&D insurance will pay the policy's face value (also called a death benefit) to the beneficiary if the policyholder dies in an accident or survives the accident but suffers dismemberment.

Accidental Death

Under an AD&D policy, accidental death covers a death due to unforeseen circumstances that are not illness- or health-related. Covered accidental deaths may include:

  • Traffic accidents

  • Drowning

  • Falls

  • Exposure to the elements

  • Heavy equipment accidents

  • Common carrier accidents (Fare-paying accidents within trains, subways, planes, Uber, ferries, taxis, buses and more)

If you do not die immediately from the accident, you may still be covered if your death is related to the accident and occurs within a specific time frame. Many insurers impose a time limit on coverage following an AD&D-protected accident — typically within 90 days of the accident. However, the death must be directly related to the accident.

In 2019 alone, there were 33,244 fatal car crashes in the U.S.

Dismemberment

AD&D policies will pay a specified portion of the death benefit if the policyholder suffers accidental dismemberment.

If the policyholder loses one leg or one arm, their policy may pay half of the death benefit. If they lose two or more limbs, their policy may pay the full death benefit. Sudden loss of hearing or vision (not due to natural causes) is also often covered by AD&D, with the same applied rules. If the policyholder loses one eye, their policy may pay half of the death benefit. If they lose both eyes, their policy may pay the total value of the death benefit.

Dismemberment covers permanent or partial paralysis, meaning injuries from an accident resulting in complete loss of use of one or more limbs. This includes paraplegia, quadriplegia, uniplegia, triplegia and hemiplegia.

Circumstance

What It Covers

What Beneficiaries Receive

Accidental Death

Accidental deaths (e.g., traffic accidents, drowning, falling off a cliff)

Full death benefits

Dismemberment

Permanent/partial paralysis, loss of a limb, loss of speech or hearing

Typically, 50%-100% of policy's face value (death benefits) depending on the severity of dismemberment, loss of speech or hearing or paralysis

The insurer and policy will define their coverage for different types and extents of injuries. Be sure to understand exactly when and how you're covered before buying your AD&D policy.

Does AD&D Cover Heart Attacks?

Basic AD&D policies will not cover medical ailments like heart attacks and strokes. AD&D insurance will cover only deaths and injuries from accidents, which is defined by the insurance coverage. AD&D insurance will not cover you if you are hospitalized or die due to an infectious disease or virus.

AD&D death benefits are similar to life insurance but much more limited in coverage.

Does AD&D Cover Cancer?

AD&D policies will only cover accidental deaths or dismemberment, it will not cover death due to natural causes and illnesses such as cancer, diabetes, old age and brain tumors. However, it is possible to add a "living benefit" rider to your life insurance policy, which can help policyholders facing a covered illness.

Car Accident Fatalities by State

State

Fatal Crashes

Alabama

856

Alaska

62

Arizona

910

Arkansas

467

California

3,316

Colorado

544

Connecticut

233

Delaware

122

District of Columbia

22

Florida

2,950

Georgia

1,377

Hawaii

102

Idaho

201

Illinois

938

Indiana

751

Iowa

313

Kansas

362

Kentucky

667

Louisiana

681

Maine

143

Maryland

484

Massachusetts

321

Michigan

902

Minnesota

333

Mississippi

581

Missouri

818

Montana

166

Nebraska

212

Nevada

285

New Hampshire

90

New Jersey

525

New Mexico

368

New York

876

North Carolina

1,284

North Dakota

91

Ohio

1,039

Oklahoma

584

Oregon

451

Pennsylvania

990

Rhode Island

53

South Carolina

922

South Dakota

88

Tennessee

1,040

Texas

3,294

Utah

225

Vermont

44

Virginia

774

Washington

494

West Virginia

247

Wisconsin

526

Wyoming

120

*2019 fatal crash totals from the IIHS

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How Does AD&D Insurance Differ From Life Insurance?

Life insurance and AD&D insurance both pay death benefits to the beneficiaries if the policyholder dies, but there are a few notable differences.

AD&D is not a substitute for life insurance — it pays for limited circumstances: if you die or are dismembered in an unexpected accident. It works well as an addition, or rider, to life insurance and provides an extra death benefit to beneficiaries in addition to the regular life insurance policy. This added death benefit is known as double indemnity, and increases the insurance payment if your death was due to an accident.

AD&D insurance can be purchased as a standalone policy but can also be an added benefit (rider) to your existing life insurance policy.

Think of it as supplemental life insurance that may increase your beneficiaries' death benefit if both policies cover the same event. Think of it as supplemental income, if you become dismembered in an accident, something life insurance would not cover.

Here are a few differences between accidental death and dismemberment insurance and life insurance:

Circumstance

AD&D Insurance

Life Insurance

Death caused by natural causes (heart attack, stroke, brain tumor and more)

No

Yes

Death caused by unnatural causes or accidents (slip and falls, motor vehicle accidents and more)

Yes

Yes

Death caused by drunk driving

No

Yes

Death caused by accidental drug overdose

No

Yes

Death caused by suicide

No

Yes — if the policy has been active for a minimum of two years

Death caused by illness (cancer, mental illness and more)

No — not under a basic policy. However, the policyholder can purchase a separate rider that could cover illness-related death

Yes

Accident that results in loss of a limb, sight, hearing or speech

Yes

No

Accident that results in loss of use of limb(s)

Yes

No

Accident that results in paralysis

Yes

No

If you add AD&D as a rider to your existing life insurance policy, your beneficiaries will receive death benefits from both the AD&D and life insurance policy in the event of an accidental death.

AD&D is not a substitute for life insurance — it pays if you die or are dismembered in an unexpected accident.

AD&D Insurance: Pros & Cons

Pros

Cons

Typically more affordable than life insurance

Limited coverage

Financial support for beneficiaries

Coverage ends when you switch jobs (if your AD&D coverage was through an employer)

Double indemnity (if the AD&D is a rider to life insurance, the policy payout can double) 

Does not build cash value

No medical exams

Covers accidental dismemberment or death

Pros Explained

  • Typically more affordable than life insurance: Policy costs are typically lower than life insurance. AD&D coverage may be free if offered through your employer's group plan. It can also be sold privately and in conjunction with a life insurance policy.

  • Financial support for beneficiaries: If you survive an accident but lose a limb that affects your ability to work, you can replace some of your lost income while you recover or seek a new job.

  • Double your insurance payout: Through double indemnity (you have both AD&D and life insurance), then your beneficiaries may receive both death benefits if you die an accidental death.

  • No medical exams: You do not need to take a medical exam or be in good health to get AD&D coverage.

Cons Explained

  • Limited coverage: Compared to life insurance, deaths in AD&D policies are covered only due to accidents. You will not be covered for health-related deaths.

  • Coverage ends when you switch jobs: The AD&D coverage that you get through a group plan at work will likely end if you switch jobs.

  • No cash value: AD&D insurance does not have a cash value component, like a permanent life insurance policy would.

AD&D Insurance FAQs

Is AD&D insurance worth getting?

AD&D insurance can save your beneficiaries from financial hardship if you are dismembered or killed in an accident. If you work in a high-risk industry or have risky recreational activities and driving habits, the additional accident coverage is worth it.

How do you get AD&D insurance?

Many people add an AD&D rider to their individual life insurance policy through their workplace. Stand-alone private life insurance policies are available from private insurers. Some insurers may even accept applicants without a medical exam or health questionnaire.

Does AD&D cover heart attacks or cancer?

AD&D insurance does not cover heart attacks, cancer or strokes. It only covers injuries or deaths from accidents — not illnesses or natural causes.

How much does AD&D insurance cost?

Depending on your coverage, most AD&D policies usually cost between $7 and $10 monthly per $100,000 of coverage. Age will significantly affect your rates — typically the older you are, the higher your premiums. Still, AD&D insurance is typically cheaper than life insurance.

Be Prepared With AD&D Insurance

Unexpected accidents can occur anytime, and the consequences can be felt by loved ones. AD&D insurance can provide a cash benefit after a death or dismemberment caused by an accident. AD&D coverage is a cost-effective and valuable addition to your current life insurance benefits package.

SmartFinancial can help you look for the life insurance policy you and your beneficiaries need at a low price. An insurance agent can help you add AD&D insurance to your policy too. Enter your zip code below and fill out our easy questionnaire to receive your free quotes.

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