What is Accidental Death and Dismemberment Insurance?

Sometimes accidents happen that can have terrible consequences. And while no one likes to dwell on the “what ifs”, we still need to be prepared for whatever life throws at us. You never want to be caught unprepared in the event of a catastrophe. 

If you want a little bit of added security for yourself and your family, you might consider Accidental Death and Dismemberment Insurance on top of your life insurance policy to best prepare for the unexpected. 

Accidental Death and Dismemberment Insurance is a kind of additional insurance usually attached as a rider to an existing health or life insurance policy. It covers the policyholder in the event of death or dismemberment from what is considered an accident. 

Dismemberment is defined as the loss or loss of use of a previously functioning body part. This could be limbs and/or appendages, but it can also be eyesight, hearing, etc. Also called double indemnity, Accidental Death and Dismemberment Insurance pays out twice as much as your original life insurance in the event of accidental death, and a certain percentage in the case of dismemberment. 

How Accidental Death and Dismemberment Insurance Works

When attached to a life insurance policy, beneficiaries can receive a payout from Accidental Death and Dismemberment Insurance in the event of an accident. An accident can include:

What is Accidental Death and Dismemberment Insurance?
  • Drowning
  • Car accidents
  • Unintentional poisoning
  • Homicide
  • Exposure to the elements
  • Falls

This is not a comprehensive list of coverage scenarios, but gives an idea of some of the types of accidents covered by the insurance. Not every death is considered an accident and therefore might not be covered. Make sure that you and your loved ones understand what constitutes an accidental death in your policy to avoid confusion should the worst happen.

In the event of accidental death, your beneficiaries would receive double the amount of your life insurance policy. So, if you have a life insurance policy worth $100,000, adding Accidental Death and Dismemberment Insurance would give your beneficiaries $200,000 in the event of accidental death. 

When an accident results in dismemberment and/or disability, you and your beneficiaries receive a percentage of the total coverage payout based on overall coverage and specific insurance plan. The severity of the dismemberment often coincides with the payout rate, with more severe accidents and injuries receiving higher payouts. 

If the dismemberment is severe enough, with several dismemberments and/or disabilities occurring contemporaneously, it is possible to receive a full payout from your Accidental Death and Dismemberment Insurance. 

Limitations AD&D

It is important to note that there are a few specific circumstances where Accidental Death and Dismemberment Insurance is not applicable. Typically, these might include:

  • Drunk driving
  • Drug overdose
  • War
  • Death during risky activities (skydiving, car racing, etc.)
  • Death from illness, physical or mental

Illness could be an infection, cancer, death during surgery or suicide due to mental illness. The specific circumstances vary depending on the individual insurance plan. 

In the event that you die from an accident some time after the accident occurred, it must be proved that the accident was the direct cause of death. Again, be sure to understand the contents of your insurance policy before counting on a settlement. 

What is Accidental Death and Dismemberment Insurance?

In the case of a drug overdose, it is best to consider that life insurance companies always calculate the amount of risk they are undertaking when offering a life insurance policy and may therefore deny drug users insurance. Since drug overdoses, including alcohol poisoning, are often not covered under most Accidental Death and Dismemberment Insurance policies, those suffering from alcoholism should read this post relating to how alcohol can get them declined from life insurance coverage in general. 

Additionally, accidental death while intoxicated may disqualify coverage. Consult an expert to determine whether your drinking can negate settlement coverage. 

When considering AD&D Insurance, it’s a good idea to keep High-Risk life insurance in mind, as well. This article might better answer your questions, as Accidental Death and Life Insurance does not always cover dangerous activities. You want to get the most coverage out of your policy and don’t want to give companies an excuse to deny a settlement. 

Settlement Options

You can receive life insurance and Accidental Death and Dismemberment Insurance settlements in a variety of ways. To learn more about settlement options, check out this post on our blog. When consulting with a financial advisor, be sure to discuss the settlement option that works best for you and your loved ones. 

How Will it Affect My Life Insurance?

Accidental Death and Dismemberment Insurance really does not have any effect on your original life insurance plan. The contents of your life insurance policy remain exactly the same, and the additional insurance is just that. Accidental Death and Dismemberment Insurance is only an additional form of coverage. Which pays out under specific circumstances, some of which are listed above. 

Do I need Life Insurance in Order to Obtain Accidental Death and Dismemberment Insurance?

Not always. In some cases you can purchase AD&D Insurance by itself without a preexisting life insurance plan. However, it is still recommended that you obtain both Accidental Death and Dismemberment insurance and life insurance. This is in order to get the maximum amount of coverage possible. 

Which Companies Offer AD&D Insurance?

Most companies that offer life insurance also offer AD&D insurance, since the two complement one another. These include:

  • Lincoln Financial
  • John Hancock
  • Northwestern Mutual
  • State Farm
  • Mass Mutual

And many more. Each company may offer a different type of insurance package at a different rate. So it is important to work with an advisor in order to find the policy that fits into your budget.

Depending on what life insurance plan you already have, you may want to browse around. See if you can add Accidental Death and Dismemberment Insurance to your plan and still save some money.

 It never hurts to browse and if you can get similar coverage for a cheaper rate it might be the best option for you to switch and save. And even if you decide not to get additional insurance, looking for a better rate is always time well invested. 

How Much Does Accidental Death and Dismemberment Insurance Cost?

Like life insurance, Accidental Death and Dismemberment Insurance costs more for more coverage. The average cost for $100,000 of coverage is an additional $7 tacked onto your premium. It increases in multiples of $7 per $100k of coverage. 

For instance, $500,000 worth of coverage costs an additional $35. How much coverage you need might be based on how much you can afford. As well as how much is right for you and your family. 

Do I need Accidental Death and Dismemberment Insurance?

Accidental death and dismemberment insurance can really make a big difference to you and your family. Accidents can strike randomly and without prejudice. Young people, despite their general belief that they are invulnerable, are more likely to be killed in car accidents. Whereas senior citizens are more at risk of death due to a fall. No one is immune to accidents. 

By doubling the life insurance payout for your beneficiaries, you can ensure that they are well provided for. This is in the event of an unforeseen tragedy. Having this type of coverage also helps put your mind at ease in an increasingly uncertain world.

While it is unlikely that you will ever have to collect on your AD&D insurance, it could always help to get double the financial protection. And for only a small increase in your premium every month. Accidents are called such because they are unforeseen. 

We never know what tomorrow brings, which is why we have life insurance. So get the most out of your life insurance! Consider adding an accidental death and dismemberment rider to your policy. 

How Can We Help

Here at NextGen Life Insurance, we specialize in getting individuals the right kind of life insurance for their specific situation. With access to all the top life insurance providers, we can help you compare rates. We can also find the right policy and answer any questions you have about life insurance. We will help put your mind at ease!

Curious about whether or not you can be getting a better deal out of your life insurance policy? Or believe that accidental death and dismemberment insurance is right for you and your loved ones? Get a free quote today! There is no harm in making sure that you have the best protection possible at the best rate available. Take care of your family now, tomorrow and always.

Bear in mind that some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. Keep in mind that I like these companies and their products because of their quality and not because of the commission I receive from your purchases. The decision is yours, and whether or not you decide to buy something is completely up to you.