What is Accidental Life (AD&D)?
Accidental life insurance, also known as accidental death and dismemberment (AD&D) insurance, is a type of insurance that provides a death benefit in the event of the policyholder’s death due to an accidental injury. The policy may also provide financial benefits for other accidental events such as the loss of a limb or a permanent disability. AD&D is often sold as a supplemental policy and is added to a base life insurance policy for additional protection, typically up to double the face value of the base policy.
AD&D insurance is often far less expensive than traditional life insurance and
can provide a great measure of financial security for policyholders and their families.
Burns
Third-degree burns or burns that cover a certain percent of the body.
Dismemberment
Loss of limbs, fingers, toes, or eyesight, hearing or speech.
Paralysis
Total and permanent paralysis.
Coma
Medically induced or traumatic coma.
Accidental Death
Unexpected and unforeseeable accidents, such as a car accident, a fall, drowning, or a fire.
Examples of AD&D Insurance
Sarah has a $500,000 AD&D policy.
Sarah was in a car accident while on a work trip and lost her sight.
Her AD&D insurance policy pays her a benefit of $500,000 for the loss of sight.
Jarod has a $750,000 term life insurance policy with a $250,000 AD&D rider.
If Jarod passed away from a heart attack—a natural cause—the insurance
company would pay his beneficiary $750,000.
If Jarod passed away in a car accident, his beneficiary would receive
the $750,000 plus the $250,000 AD&D for a total of $1,000,000.