Life Insurance: Understanding Dependent Coverage And Benefits

Accidental death and dismemberment (AD&D) insurance is an optional financial protection plan that provides a beneficiary with cash if the policyholder is accidentally killed or loses certain body parts. AD&D insurance is usually added as a rider to a health or life insurance policy and covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss, or the loss of use, of body parts or functions (such as limbs, speech, eyesight, and hearing).

What is accidental death and dismemberment (AD&D) insurance?

Accidental death and dismemberment (AD&D) insurance is usually added as a rider to a health or life insurance policy. It covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss, or the loss of use, of body parts or functions (such as limbs, speech, eyesight, and hearing).

AD&D insurance is limited and generally covers unlikely events. It is supplemental life insurance and is not an acceptable substitute for a full life insurance policy. It is usually less expensive than a full life insurance policy.

Most AD&D policies pay a percentage for the loss of a limb, partial or permanent paralysis, or the loss of use of specific body parts, such as the loss of sight, hearing, or speech. The types and extent of injuries covered are particular to and defined by each insurer and policy.

Voluntary accidental death and dismemberment (VAD&D) insurance is an optional financial protection plan that provides a beneficiary with cash if the policyholder is accidentally killed or loses certain body parts. VAD&D is also a limited form of life insurance.

Who does AD&D insurance cover?

Accidental death and dismemberment (AD&D) insurance is an optional insurance plan that covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss, or the loss of use, of body parts or functions (such as limbs, speech, eyesight, and hearing).

AD&D insurance is usually added as a rider to a health or life insurance policy. It is limited and generally covers unlikely events. It is not an acceptable substitute for a full life insurance policy.

AD&D insurance can be purchased to cover the insured's spouse/domestic partner or dependent child. The employee is the automatic beneficiary of the policy.

What does AD&D insurance pay out for?

Accidental death and dismemberment (AD&D) insurance is usually added as a rider to a health or life insurance policy. It covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss, or the loss of use, of body parts or functions (such as limbs, speech, eyesight, and hearing).

Most AD&D policies pay a percentage for the loss of a limb, partial or permanent paralysis, or the loss of use of specific body parts, such as the loss of sight, hearing, or speech. The types and extent of injuries covered are particular to and defined by each insurer and policy.

Voluntary accidental death and dismemberment (VAD&D) insurance is an optional financial protection plan that provides a beneficiary with cash if the policyholder is accidentally killed or loses certain body parts. VAD&D is also a limited form of life insurance and is generally less expensive than a full life insurance policy. It is often purchased by workers in occupations that come with physical risk.

How does AD&D insurance differ from life insurance?

AD&D insurance, or accidental death and dismemberment insurance, is a type of insurance that provides financial protection in the event of an accident that results in death or serious injury. It is designed to supplement other types of insurance, such as life insurance, and typically pays out a lump sum to the policyholder or their beneficiaries.

Life insurance, on the other hand, provides financial protection in the event of the insured person's death, regardless of the cause. It is a more comprehensive form of insurance that covers a wider range of scenarios, including natural death, illness, and accidents. Life insurance policies typically have a specified term, such as 20 or 30 years, and the policyholder pays premiums throughout the term to maintain coverage.

One key difference between AD&D insurance and life insurance is the scope of coverage. AD&D insurance only covers accidental deaths and dismemberment, while life insurance covers any cause of death. This means that AD&D insurance is more limited in its protection and may not provide coverage for all types of incidents.

Another difference lies in the beneficiaries of the policies. In the case of AD&D insurance, the policyholder themselves is typically the beneficiary, as the insurance is intended to provide financial support to the policyholder in the event of an accident. In contrast, life insurance policies usually designate a spouse, child, or other dependent as the beneficiary, with the intention of providing financial security to loved ones after the insured person's death.

Additionally, AD&D insurance is often less expensive than life insurance, as it covers a more specific and limited range of incidents. The cost of AD&D insurance can vary depending on factors such as age, occupation, and health status, but it generally offers a more affordable option for those seeking additional financial protection in the event of an accident.

In summary, while both AD&D insurance and life insurance provide financial protection, they differ in their scope of coverage, beneficiaries, and cost. AD&D insurance is a more targeted form of insurance that specifically covers accidental deaths and dismemberment, while life insurance offers broader coverage for any cause of death. By understanding these differences, individuals can make informed decisions about their insurance needs and ensure they have the appropriate level of protection in place.

Where can I buy AD&D insurance?

AD&D insurance is accidental death and dismemberment insurance. It is usually added as a rider to a health or life insurance policy. It covers the unintentional death or dismemberment of the insured. Dismemberment includes the loss, or the loss of use, of body parts or functions (such as limbs, speech, eyesight, and hearing). It is usually offered by employers, along with group life insurance, though there are a handful of insurers that sell stand-alone policies.

You can get AD&D insurance through work or individually through an insurer. Group AD&D insurance is a workplace benefit that employers can offer employees. This kind of coverage tends to cost less than individual AD&D insurance since the risk is spread across more individuals. Individual AD&D insurance may cost more than group AD&D insurance. However, you may have more flexibility since you can shop with multiple insurers and choose from a wider range of coverage amounts and terms. Plus, you can keep your policy if you change jobs. You can get these policies from any insurer that offers them. When you apply, you’ll need to fill out some paperwork with information about yourself, your job, and your lifestyle.

AD&D insurance is typically sold as an add-on to a life insurance policy. For those who don't have life insurance or are only in need of AD&D insurance for a short duration, such as during travel abroad, they may benefit more from a standalone AD&D insurance plan. Standalone AD&D policies are more typical for individuals who don't qualify for standard life insurance but want some level of coverage, and they aren't available from all insurers.

Some insurers that offer AD&D insurance include:

• Farmers Insurance
• Aflac
• The Hartford (formerly, Aetna)

Frequently asked questions