Accidental Death and Dismemberment Insurance Explained

Construction worker finishing wooden beam with sander

It’s uncomfortable to talk about, but it is necessary to discuss. What will happen if an accident kills you? Will your family be taken care of when you’re gone? What if you lose a limb and you can no longer work? Will you be able to make adjustments and pay your bills? It’s because of these questions that many insurers provide Accidental Death and Dismemberment Insurance policies.

Accidental Death and Dismemberment a.k.a. AD&D coverage can provide compensation for you and your loved ones should an incident abruptly cause your death or seriously injure you. But while having an AD&D insurance policy is a good idea, many people don’t know what it does and does not protect. There are also misconceptions about the cost of accident insurance given the severity of the situations covered. Let’s end any doubt about the true benefits of this type of accident insurance policy.

Accidental Death Insurance

Accidental death insurance is typically added to most life insurance policies to provide compensation for the listed beneficiaries should you die in an accident. Insurers usually have a face amount set to pay if you die or get severely injured in an accident. In the case of accidental death, the insurer will pay 100% of the agreed upon benefit to the beneficiaries.

There are a great number of specific circumstances that are covered in your AD&D policy. Typically, AD&D insurance will pay benefits if you were to die in a car accident, a fall, exposure to the elements, drowning, accidents involving heavy equipment, and homicide. It is important to thoroughly read your policy to see what terms and conditions apply.

Dismemberment Insurance

While an insurer pays 100% of the face benefit amount in the case of accidental death, it will usually just pay a percentage of the face amount based on the severity of the injury. While it is labeled as “dismemberment,” AD&D can provide benefits and coverage for injuries aside from the loss of a limb or a digit. Aside from providing compensation for the loss of a hand, arm, leg, or foot, AD&D also provides benefits for those who have lost their sight, lost their hearing, or have become paralyzed due to an accident. Your AD&D policy should have a proper breakdown of what injuries are covered and the amount of benefits that are paid for each unfortunate circumstance.

Exclusions

While AD&D insurance covers a number of different circumstances that cause accidental death or severe injury, not every incident is covered. AD&D doesn’t cover death or injury caused by participation in a sporting event or certain recreational activities such as skydiving, bungee jumping, and car racing. Other exclusions include death or injury caused by suicide or attempted suicide. Death or dismemberment caused while the insured was under the influence of drugs or alcohol is also excluded, which includes injury or death caused by drunk driving or drug overdose. Many AD&D plans will not cover deaths due to war or surgery. It cannot be stressed enough for you to read through your policy to know what is covered and what is not.

AD&D Insurance Cost

It’s worthwhile to not only get an AD&D policy due to the protections, but because it is low in price. The reason why these policies are so low in cost and high in payout is due to the risk. For example, according to the Insurance Information Institute, Americans have a 1 in 114 chance of dying in an automobile accident compared to 1 in 4 Americans dying due to heart disease. Since it is unlikely that you would experience an accidental death or an injury that severely impairs you, insurers can offer AD&D insurance on its own or tacked onto other insurance policies at a low rate. It is ultimately worthwhile to have the coverage due to the low price, even if the chances are slim that you’ll die in a grim accident.

Now that you fully understand AD&D insurance, it’s time to get a policy. Freeway Insurance can provide you a number of low-cost, high-coverage accidental; death and dismemberment insurance offers to choose from. Get free AD&D insurance quote online or give us a call to become better protected today.